Chrysler cancels request for financial help from Ontario, feds
Chrysler Group assembly worker Brenda Williams checks under the hood of a 2014 Dodge Ram pickup truck for quality control at the Warren Assembly Plant in Warren, Michigan December 11, 2013. (REUTERS/Rebecca Cook)
Chrysler Canada has abandoned its request for $700 million in government funding.
The company said in a statement Tuesday that it intends to proceed with the development of a new minivan at its Windsor plant, and to continue production of the Chrysler 300 and Dodge Charger and Challenger in Brampton.
Chrysler will pay for its own capital investments, dropping what had been reported as a $700-million ask of the provincial and federal governments, but says the company will be influenced by the outcome of its next round of collective bargaining with its employees.
“It is clear to us that our projects are now being used as a political football, a process that, in our view, apart from being unnecessary and ill-advised, will ultimately not be to the benefit of Chrysler,” the statement says. “As a result, Chrysler will deal in an unfettered fashion with its strategic alternatives regarding product development and allocation, and will fund out of its own resources whatever capital requirements the Canadian operations require.”
Progressive Conservative Leader Tim Hudak recently accused the company of targeting Ontario taxpayers with a “ransom” demand — either provide the auto maker with public funding or risk the losing jobs to plants in the United States.
PC MPP Jane McKenna said Chrysler has had 50 consecutive months of sales growth, and has yet to fully pay back a previous loan from the Ontario government.
“All of sudden now they’ve made an about-face that they don’t need the money,” McKenna said. “I think people are recognizing the fact that you don’t need to have a hand out in good times and bad times, especially when they’re in good times.”
Chrysler said its investment in Ontario plants will be governed by a number of considerations, such as the competitiveness of the country on a global basis.
“Of particular importance for this evaluation will be the outcome of our collective bargaining negotiations that will be carried out in 2016 with UNIFOR (the union representing Chrysler workers),” the statement says.
Sergio Marchionne, chairman and chief executive of Chrysler Group LLC, said the firm’s commitment to Canada remains strong but he regretted that he had been unable to convey the highly competitive nature of the market competing for auto manufacturing.
Deputy Premier Deb Matthews said the provincial government is prepared to make strategic investments in the auto sector.
“Let’s make sure we keep those jobs here,” Matthews said of the Chrysler plants.
UNIFOR national president Jerry Dias called Chrysler’s decision to withdraw its request for public funding “regrettable.”
While applauding the company’s decision to proceed with a new minivan at the Windsor plant, the union is concerned that the province has lost an opportunity to secure manufacturing jobs for the long-term.
Should Ontario provide grants or loans to car makers?
Yes, it will keep jobs in the province
No, businesses should pay their own way