New Chrysler Minivan Would Keep Windsor Plant Running for 30 Years, Says Industry Minister

Thursday, January 16, 2014

The Windsor Star/Grace Macaluso

The more than $2 billion Chrysler Group plans to invest in the  next generation minivan would secure the future of  the Windsor Assembly Plant for the next three decades, federal Industry Minister James Moore said Wednesday.

“The auto industry is an incredibly important part of the Canadian economy and we want Chrysler to do well,” Moore said following a meeting in Detroit with Chrysler Group CEO Sergio Marchionne and his Canadian counterpart, Reid Bigland. “We’d love to see the new Town and Country built in Canada and it’s a long-term commitment –  about a 30-year commitment when they do decide to make that decision.”

The Windsor Assembly Plant employs more than 4,500 hourly workers who assemble the Chrysler Town and Country and Dodge Grand Caravan on three full shifts.

Marchionne said this week that building the new minivan in Windsor is a multi-billion dollar commitment contingent upon the level of financial assistance Chrysler received from Ottawa and Queen’s Park.

But Moore cautioned that the government must keep taxpayers in mind when it comes to determining the level of financial support it is willing to give to Chrysler’s investment.

“Canadian taxpayers have been very generous to the auto industry in Canada,” said Moore. “Chrysler and the government of Canada have had a very long-term relationship through the worst part of the recession with the loans that Canada offered. And we certainly think there are great opportunities for us to work together to create jobs and build cars in Canada.

“But the patience of the taxpayer is finite.”

As  the North American International Auto Show got underway this week, Marchionne and Bigland began meetings with  federal and provincial government officials in a bid to secure an economic package that would finance a portion of the automaker’s investment.

Issuing what sounded like a threat, Marchionne said that the investment for Windsor was not a sure thing. “I’ve got to make sure that the environment and the conditions that support the investment are adequate to ensure our proper return on capital,” he told reporters at the Detroit auto show. Marchionne also expressed concern about the cost of labour at Canadian auto plants compared to U.S. plants.

Moore said he  received only the  “broad strokes” of Chrysler’s investment  at the meeting, and further discussions with the automaker and the Ontario government would take place over the next several weeks. He did say that Chrysler’s investment would exceed $2 billion and that the automaker  plans to begin production of the new Town and Country sometime in 2015.

During the meeting with Chrysler, Moore pointed out advantages of building vehicles in Canada, including the recently signed free trade deal with the European Union, the minister said.

“Sergio Marchionne pushed very hard for that — getting rid of tariffs on cars going in both directions,” said Moore. “Europe is a massive, 500-million person market  for Canadian goods and products and the auto sector has a great opportunity there.”

Moore rejected the argument put forth by Chrysler and other auto industry executives that Canada is not as aggressive as other jurisdictions, such as Mexico and the southern U.S., when it comes to competing for automotive investment. Over the last five years, Canada’s share of $42 billion in auto investment totalled about $2 billion, said Bigland.

“The opportunities in Canada, we think, match up very well with any other markets for these companies to operate and do business in,” Moore said. “We have the lowest corporate taxes in 55 years, we have an incredibly educated and well-skilled workforce, we have great government supports with the $250-million Automotive Innovation Fund. And, of course, we were there to backstop and support and protect the Canadian auto industry in the worst parts of the recession.”

The federal and Ontario governments   contributed $2.9-billion to the bailout of Chrysler when it when it went into U.S. bankruptcy protection in 2009. The automaker has since repaid those loans.