Chrysler Will Use Own Funds for Minivan Production in Canada

Tuesday, March 4, 2014 Clothier

Chrysler Group LLC is withdrawing a request for financial backing from federal and provincial governments in Canada and will use its own funds for production of minivans and other vehicles in Windsor and Brampton, Ontario.

The development of the next version of its minivan will be located in Windsor, Chrysler said in a statement today. A Brampton, Ontario, facility will also benefit from substantial upgrades on both the Chrysler 300, and the Dodge Charger and Challenger, the U.S. automaker owned by Italy’s Fiat Spa, said.

Chrysler had been negotiating with Canadian officials for loans to help it prepare those facilities for the next stage of production. Last month, Sergio Marchionne, chief executive officer of Chrysler and Fiat, said the talks with government officials were “not even close.” Chrysler will use its own resources to fund the development, today’s statement said.

“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 carmaker said.

The investment, which Marchionne previously said may total billions of dollars, would be the largest Fiat has made since Chrysler exited bankruptcy in 2009. Marchionne said last month that he had heard from other jurisdictions including the U.S. and Mexico about moving the production. They’re likely to offer better incentives than Canada, he said at the time.

Canada said Feb. 11 it was increasing funding for automakers by C$500 million ($450 million) to attract more investment from companies such as Chrysler as output declined amid global competition.

The company’s two minivans, the Chrysler Town & Country and the Dodge Caravan, were the second and third best-selling minivans in the U.S. last year, trailing the Honda Odyssey, according to Autodata Corp. They are built at the Windsor factory.