Chrysler's Ontario Plants Could Depend On Government Money

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SERGIO MARCHIONNE CHRYSLER
Chrysler and Fiat head Sergio Marchionne. Chrysler is planning to invest $1 billion or more in minivan production, and Ontario wants the business. (Bill Pugliano/Getty Images) | Bill Pugliano via Getty Images

Ontario's Minister of Economic Development, Trade and Employment will be at the International Auto Show in Detroit this week.

Eric Hoskins will meet executives from all five major automakers with production facilities in the province.

"I love cars and am looking forward to touring the show," Hoskins said. "But my primary responsibility, and the time I will be spending in Detroit, will be spent meeting with senior executives of all five manufacturers with assembly plants in the province."

Hoskins is scheduled to begin meeting with executives Monday. One of the men he'll meet is Sergio Marchionne, head of Chrysler and Fiat.

"I’m going to talk to him about what their expansions plans are in Ontario, including the possibility of Windsor, and how the Ontario government can make that happen," Hoskins said. "Chrysler has indicated their commitment to continue with the minivan and their hope of introducing one of the next series of minivans into that assembly plant.

"I want to know what Ontario can do to make that happen."

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Monday, during a news conference at the auto show in Detroit, Marchionne told journalists investment in Windsor and Brampton could depend on government investment and union concessions.

Chrysler already got the United Auto Workers in the States to agree to concessions and a two-tiered wage system.

The CAW, now Unifor, has long said it will not agree to such concessions.

Marchionne said there is a large-scale investment "in excess of a $1 billion" coming to the minivan platform but wouldn't say whether investment will be made in the Windsor plant.

"There’s a large-scale investment required to do the minivan, but I didn’t say in Windsor," Marchionne said.

Marchionne said Chrysler has had "very good dialogue with the government, so far."

"Marchionne is a no-nonsense guy, if Canada isn’t competitive, he’s gone," auto analyst Dennis DesRosiers said. "We have no fundamental advantage anymore, other than a low dollar."

Even that can't be counted on anymore, DesRosiers added.

"Chrysler’s up against the wall. I think there is one more platform survival and then you have to seriously question where Windsor is," DesRosiers said.

It will be “truly vulnerable” in 2020, DesRosiers added.

DesRosiers noted nine permanent plant closures in Canada. A tenth will close in Oshawa in 2016 when GM closes its assembly plant there.

Province invested in Ford

Last year, Ontario contributed $70.9 million to upgrade the plant the Ford Oakville plant.

Prior to that, the provincial government helped bail out GM and Chrysler during the global recession.

"Since the bottom of the recession in 2009, we’ve added almost 15,000 jobs to the auto sector, whether it’s in the assembly plants or supply chain," Hoskins claimed.

However, the PC critic for economic development, MPP Jane McKenna, said the bailout only saved 2,000 jobs and did little to create new jobs.

"Did it actually create more jobs or just secure the jobs they already had?" McKenna asked.

McKenna said she doesn't believe in "corporate welfare."

"We need to create the right conditions for all businesses to succeed," she said. "You should have a broad-based tax relief. If you just do constant Band-Aids, every time you jump in the water the Band-Aid falls off.

"We are not put in a position to pick winners and losers."

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