G.M.’s Shutdown of Canadian E.V. Plant Backfires, Spurring Ottawa to Bolster Rivals and Accelerate Green Shift

INGERSOLL, Ontario — What General Motors intended as a pragmatic response to slumping demand for its electric delivery vans has instead ignited a fierce backlash in Canada, where federal and provincial leaders are vowing to redirect billions in subsidies away from the American automaker and toward European and Asian rivals eager to fill the void.

The temporary idling of G.M.’s CAMI Assembly plant here — Canada’s first dedicated electric vehicle factory — was announced in April as a cost-cutting measure amid high inventories and slower-than-expected sales of the Chevrolet BrightDrop vans produced there. The move, which led to the layoff of about 1,200 workers for much of the year, was framed by the company as a necessary recalibration, not a retreat from its electrification goals. But in a nation already reeling from trade tensions under the second Trump administration, the shutdown has been recast as a betrayal, prompting Ottawa to fast-track incentives for competitors like Volkswagen and Hyundai that promise to preserve and expand local jobs.

“This was supposed to be our moment to lead the world in green manufacturing,” said Jerry Dias, president of Unifor, the union representing the CAMI workers, during a rally outside the plant last week. “G.M. took our money, retool our factory, and then pulled the plug when times got tough. Now we’re turning the page — without them.”

The plant, in the small southwestern Ontario city of Ingersoll, reopened in late 2022 after a $1.3 billion retooling, backed by up to $518 million in combined federal and Ontario funding as part of a broader $2 billion G.M. investment in Canadian E.V. production. It was hailed as a cornerstone of Canada’s ambition to capture a slice of the global battery and vehicle market, projected to reach $1 trillion by 2030. Production was slated to hit 50,000 vans annually by now, but sales stalled at just 274 in the first quarter of 2025, hampered by fleet buyers’ hesitation amid economic uncertainty and rising interest rates.

G.M. executives, including Mary Barra, the chief executive, have insisted the pause is temporary, with retooling underway for 2026 models and a commitment to resume full operations by fall. “We remain deeply invested in Canada and the CAMI facility,” a company spokeswoman said in a statement. Yet the decision has collided with broader anxieties over American protectionism, including 25 percent tariffs on Canadian auto parts imposed by President Trump in March, which Unifor blames for exacerbating the slowdown. “This isn’t just market demand,” said Mike Van Boekel, chair of Unifor Local 88 at CAMI. “It’s the Trump effect — tariffs that punish our workers while G.M. ships jobs south.”

The backfire has been swift and strategic. Prime Minister Mark Carney, a former Bank of England governor who assumed office in 2024 on a platform of economic resilience, announced last month a $1.2 billion “E.V. Resilience Fund” to lure alternative manufacturers. Volkswagen, which already operates a plant in Chattanooga, Tenn., but has eyed Canadian expansion for tariff avoidance, pledged $800 million for a battery assembly line in St. Thomas, Ontario — just 20 miles from Ingersoll — promising 2,500 jobs by 2027. Hyundai followed suit, committing $600 million to electrify its Cambridge, Ontario, facility, citing “stable incentives and a skilled work force” free from U.S. volatility.

Ontario Premier Doug Ford, whose Progressive Conservative government has long courted Detroit’s Big Three, initially threatened to sue G.M. for breaching a 2022 contract that guaranteed production continuity in exchange for subsidies. “We built this plant with taxpayer dollars, and they can’t just walk away,” Mr. Ford said at a news conference in Toronto. But with the province facing a $15 billion deficit and midterm elections looming, he pivoted to the new suitors. “If G.M. won’t play ball, we’ve got a full bench ready to step up,” he added, flanked by executives from the German and South Korean firms.

The drama underscores the fragility of North American auto integration under the United States-Mexico-Canada Agreement, which was meant to shield the sector from trade wars but has buckled under Mr. Trump’s tariff regime. Sheldon Williamson, a professor of electrical engineering at Ontario Tech University, said the CAMI shutdown highlights “the risks of over-reliance on U.S. giants whose priorities shift with Washington’s whims.” Canada, with its vast reserves of lithium and nickel critical for batteries, had positioned itself as a North American E.V. hub. Now, the G.M. retreat risks ceding that ground, though the influx of foreign investment may ultimately diversify the supply chain.

For Ingersoll’s 14,000 residents, the human toll is immediate. The plant, which accounts for 10 percent of local employment, has left families scrambling. Sarah Petrie, a 38-year-old assembler laid off in April, now drives 90 minutes to a temp job in London, Ontario. “We trusted G.M. to lead the green revolution,” she said at the rally, holding a sign reading “Tariffs Hurt Workers, Not CEOs.” Unifor has secured $10 million in federal retraining funds, but many workers, like Ms. Petrie, fear the skills learned for E.V. assembly will go unused if production doesn’t rebound.

Broader policy ripples are emerging. Mr. Carney’s government, facing pressure from the New Democratic Party, is mulling a “Buy Canadian E.V.” mandate for federal fleets, potentially sidelining BrightDrop models. In Washington, the United Auto Workers union expressed solidarity with Unifor, warning that tariffs could boomerang on American plants if Canada retaliates with duties on U.S. exports.

G.M., for its part, is recalibrating. The company has offered severance packages and relocation incentives to CAMI workers, but acceptance rates are low — less than 20 percent, per union figures. As retooling wraps up, executives are banking on a post-tariff recovery, with BrightDrop sales projected to triple in 2026 amid fleet electrification mandates.

Yet in Ingersoll, optimism is tempered. At a community hall packed with displaced workers, Mr. Dias rallied the crowd: “G.M. thought they could crush us. Instead, they’ve unleashed a monster — a Canada that builds its own future, with or without Detroit.” Outside, under gray November skies, the CAMI gates stood silent, a stark reminder that in the race for green dominance, even a temporary pit stop can shift the entire track.