'Egregious': Inside legal fights over a Canadian EV battery plant getting $15B in tax breaks
CBC
Multiple Canadian contractors that have helped build a sprawling, taxpayer-supported electric vehicle (EV) battery plant in southwestern Ontario allege they haven't been paid for millions of dollars worth of work, court records show.
Lawsuits between companies on complex projects like the NextStar Energy plant in Windsor aren't abnormal, according to a veteran construction lawyer.
"The issues raised by the pleadings delivered thus far are fairly standard stuff in the world which I inhabit," said Geza Banfai, a Toronto construction and infrastructure who is not involved in the lawsuits.
But Sylvan Canada, one of the firms that has now resorted to legal action, says its experience on the $5-billion project was far from business as usual.
"This is truly an exceptional situation — both in scale and in the complete breakdown of co-operation," says Eric Farron, the company's vice-president of operations.
Sylvan's $45-million lawsuit, filed in early July, does not directly target NextStar, a joint venture between global carmaker Stellantis and South Korea's LG Energy Solution. Instead, it accuses another South Korean company — GModis and its CEO, John Kwangho Jung — of "egregious" mismanagement that threatened on-site safety and led to costly errors.
The problems came to a head last month when GModis's alleged interference led NextStar to "abruptly" remove Sylvan from the project, the 43-page statement of claim said. Sylvan then had to lay off nearly 200 workers at the plant, Farron previously told CBC Windsor.
The allegations involve a highly anticipated battery plant in Canada's automotive capital that proponents have maintained will create thousands of jobs in a manufacturing bastion that has never fully recovered from the mass layoffs of the 2008 financial crisis.
Both the federal and Ontario governments have pledged more than $15 billion in incentives to keep the project in Canada — a move that has spurred sharp criticism, as has NextStar's plans to use hundreds of workers from South Korea to build the plant.
The public records claim NextStar has doled out several contracts — including one for roughly $250 million — to South Korean firms to handle different parts of the project.
None of the allegations have been proven in court.
In a statement, NextStar said it would not comment on legal issues, including those "it is not a party to." It did say, however, that it has hired roughly 900 people and is "very grateful" for government support.
"NextStar Energy is extremely proud of the progress made on the construction of the 4.23 million-square-foot facility, Canada's first large-scale domestic battery manufacturing facility," the statement said.
Jung and GModis did not respond to a request for comment and have not yet filed a statement of defence.
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