Auto parts giant Magna opening $50M-plus plant in Chatham

First, a blockbuster $5-billion electric vehicle battery plant is announced for Windsor that will employ 2,500 people.

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First, a blockbuster $5-billion electric vehicle battery plant is announced for Windsor that will employ 2,500 people.

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Now, a week later, a new auto parts plant in Chatham – feeding off the same transition from gas-powered to electric vehicles that is rippling across Southwestern Ontario’s auto industry – is confirmed.

Canadian auto parts giant Magna International, which already has two plants in nearby St. Thomas, will open a $50-million-plus facility that will employ about 150 people to make battery enclosures for an electric version of Ford’s popular F-150 pickup truck.

Phil Page, general manager of Magna’s Formet Industries plant in St. Thomas, said the company saw a spike in volume for battery enclosures that “couldn’t be contained within our four walls here in St. Thomas,” so the company began scouring for potential locations within a two- to three-hour radius for another production facility.

“We were looking for the right size building based on the volume increase and we fell upon Chatham, which worked for us as far as the location of the building and the resources.”

Page said about 30,000 “battery trays” are planned for production this year at the St. Thomas plant, which began making the enclosures in February. The plan for the Chatham plant is to initially produce 60,000 units per year and then expand to upwards of 120,000 battery enclosures annually. This capacity is based on a surging demand for the F-150 Lightning, which already prompted Ford to double its planned production from roughly 80,000 to 160,000 vehicles per year based on customer reservations.

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The enclosures will be built at the former Crown Metal Packaging plant, a 15,794-square-metre (170,000-square-facility) in Chatham that’s been vacant since that company ended production there in late 2015.

The company takes possession of the Irwin Street building on Friday while equipment is expected to begin arriving as early as June. The target, Page added, is to begin production by the late fall.

He said more than $50 million will be spent on the Chatham operation within the first 18 months, with the possibility of an additional $50 million investment in the future.

“It’s quite a huge investment by Magna’s standards,” Page said.

There is some room for expansion at the current site – but not too much, Page noted, because the property is constrained by neighbouring manufacturers and commercial sites.

“As of now, we do not plan to expand, but you just never know what the future holds,” Page said.

Jamie Rainbird, the manager of Chatham-Kent’s economic development department, said the municipality has focused in recent years on diversifying and growing the local economy. Looking to the growing popularity of electric vehicles, he said the new Magna plant helps “open up a door that I’m excited to have open.”

“I can’t stress how excited we are to have (Magna) here,” he said.

Chatham-Kent Mayor Darrin Canniff said the economic development department has worked on reducing the red tape involved in new development, citing Magna as a “huge example” of that success.

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“A large company like that has a lot of boxes to check, and they have a formula that works for them,” he said. “We’ve been working hard to make sure that, when they come to Chatham-Kent, all those boxes can be checked.”

When the plant is up and running, Canniff said the municipality wants Magna to consider Chatham-Kent as a great place to do business and keep the municipality top of mind when looking at other opportunities for expansion.

Page said some staff are already being trained at the Formet plant in St. Thomas, adding the first full-time crew will also receive training there.

Full-time production team members will start at $22.90 per hour, with an annual five per cent pay hike, while skilled trade positions start at $39.01 per hour.

Page said a job fair is planned for the near future. He noted the 1,500 employees in St. Thomas are being canvassed to see who may be interested in moving to the new Chatham location.

Once that shakes out, he said the company will decide on the hiring process.

The Magna announcement marks the first new large-scale automotive parts plant in Chatham-Kent in about two decades. The last major plant was Autoliv, which opened a $20-million state-of-the-art facility in Tilbury in late September 1999.

More than two decades later, the plant continues to produce inflatable curtain airbags that protect drivers and passengers from side-impact collisions.

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