Chrysler to build next-generation minivan in Windsor, withdraws request for government aid

Tuesday, March 4, 2014

The Windsor Star/Grace Macaluso

Chrysler has announced its intention to build the next generation minivan in Windsor and has withdrawn its request for government financial assistance at its assembly plants in Windsor and Brampton, CEO Sergio Marchionne said Tuesday.

“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,” Marchionne said in a statement. “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.”

However, the automaker “confirmed its intention to being to allocate to our Windsor plant the development and industrialization of the next people carrier architecture (the so-called minivan and derivatives). It has also confirmed that Brampton “will benefit from a substantial product intervention on the Chrysler 300 and Dodge family of products.”

These capital allocation decisions will depend on Canada’s “competitiveness”  and the outcome of “our collective bargaining negotiations that will be carried out in 2016 with Unifor.”

“Our commitment to Canada remains strong,” said Marchionne.

Chrysler had been negotiating with federal and Ontario government for financial assistance to help cover the cost of a $2.3 billion retooling of the Windsor Assembly Plant as well as another substantial investment at its plant in Brampton.

He had threatened to pull the investment out of Ontario if he was unable to reach an agreement with Ottawa and Queen’s Park. His request for subsidies has been criticized, in particular, by Ontario Conservative Leader Tim Hudak, who accused Chrysler of seeking “corporate welfare.”

At the Geneva auto show earlier today, Marchionne told reporters  he is not looking for subsidies, but wants a “level playing field” in terms of costs of production.

“If a country is undertaking any sort of commitment to an industrial policy, I think it needs to recognize that those choices come with an obligation to match and effectively equal what the competition is offering,” Marchionne said in a report carried by Automotive News.

More to come.