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Chrysler withdraws $700M request for Ontario assembly plants

Chrysler Group LLC says it is no longer seeking government funding to expand operations


 

WINDSOR, Ont. – Chrysler Group LLC says it is no longer seeking funding from the federal and Ontario governments to expand its operations, but will continue with plans to begin manufacturing its new minivan line in Windsor, Ont.

The auto giant said it will also continue to invest in its Brampton, Ont., plant, which builds the Dodge Charger, Challenger and Chrysler 300.

Chrysler said government officials were notified earlier this week that it will be withdrawing its request for $700 million in reported subsidies.

According to a statement on Tuesday, the company said the proposed projects were being used as a “political football”.

“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,” it said.

“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.”

Chrysler also cautioned that negotiations with the union will also play a factor in the decision.

“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 merged entity of the CAW and CEP),” Sergio Marchionne, the company’s chairman and CEO, said in the statement.

The comments come hours after Marchionne told a news conference at the Geneva auto show that he regretted how the request for government funding had become highly politicized.

“People think this is a matter of subsidizing industry — it’s not,” he said.

The auto giant has asked the federal and Ontario governments for subsidies, as part of an overall investment of $3.6 billion, to keep its production of the new Chrysler minivan in Windsor.

In January, it said it was considering a billion-dollar upgrade at its Ontario plant to build a new minivan, but it was in talks with the government about an incentive package that would help offset higher costs in Canada.

The Chrysler assembly plant in Windsor produces the Dodge Grand Caravan and Chrysler Town & Country minivans as well as several other vehicles.


 
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