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Chrysler Backtracks on Asking Canada for More Cash Chrysler Backtracks on Asking Canada for More Cash
(6 months later)
OTTAWA — After widespread criticism of its demand linking continued minivan production in Canada to more government assistance, Chrysler unexpectedly withdrew its request on Tuesday. The automaker said that it would go ahead with significant investments in two Canadian factories without financial aid. OTTAWA — After widespread criticism of its demand linking continued minivan production in Canada to more government assistance, Chrysler unexpectedly withdrew its request on Tuesday. The automaker said that it would go ahead with significant investments in two Canadian factories without financial aid.
While the governments of Ontario and Canada were negotiating with the automaker, some politicians and others had objected to the company’s seeking additional assistance just five years after it received 2.9 billion Canadian dollars from the provincial and federal governments here to help it emerge from bankruptcy. That negative sentiment was partly fed by the blunt manner in which Sergio Marchionne, the chief executive of Fiat Chrysler Automobiles who is a dual Canadian-Italian citizen, delivered the company’s message.While the governments of Ontario and Canada were negotiating with the automaker, some politicians and others had objected to the company’s seeking additional assistance just five years after it received 2.9 billion Canadian dollars from the provincial and federal governments here to help it emerge from bankruptcy. That negative sentiment was partly fed by the blunt manner in which Sergio Marchionne, the chief executive of Fiat Chrysler Automobiles who is a dual Canadian-Italian citizen, delivered the company’s message.
“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 company said in a statement.“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 company said in a statement.
Chrysler confirmed that it would make a redesigned line of minivans at its 4.4 million-square-foot plant in Windsor, Ontario, which has churned out minivans since their introduction over 30 years ago, and that additional investments would come to a factory in Brampton, Ontario, a Toronto suburb, that produces rear-wheel-drive cars including the Chrysler 300.Chrysler confirmed that it would make a redesigned line of minivans at its 4.4 million-square-foot plant in Windsor, Ontario, which has churned out minivans since their introduction over 30 years ago, and that additional investments would come to a factory in Brampton, Ontario, a Toronto suburb, that produces rear-wheel-drive cars including the Chrysler 300.
While noting that “our commitment to Canada remains strong,” Mr. Marchionne, who studied business at the University of Windsor, continued to argue in the company’s statement that government assistance for automakers is a global reality.While noting that “our commitment to Canada remains strong,” Mr. Marchionne, who studied business at the University of Windsor, continued to argue in the company’s statement that government assistance for automakers is a global reality.
“On a personal note, as a Canadian, I regret my failure in having been unable to convey the highly competitive nature of markets that offer manufacturing opportunities to carmakers that operate on a global scale,” Mr. Marchionne said. “Some of the shots across the bow following our initial approaches to the federal and provincial governments reveal, apart from political convenience, a somewhat restricted view of Canada as an industrial player in what has become a borderless economy.”“On a personal note, as a Canadian, I regret my failure in having been unable to convey the highly competitive nature of markets that offer manufacturing opportunities to carmakers that operate on a global scale,” Mr. Marchionne said. “Some of the shots across the bow following our initial approaches to the federal and provincial governments reveal, apart from political convenience, a somewhat restricted view of Canada as an industrial player in what has become a borderless economy.”
How much money Chrysler wanted and how much it planned to spend on manufacturing were never publicly revealed. A person briefed on the talks, who was not authorized to speak publicly, said the company was looking for about $700 million.How much money Chrysler wanted and how much it planned to spend on manufacturing were never publicly revealed. A person briefed on the talks, who was not authorized to speak publicly, said the company was looking for about $700 million.
Both support and opposition to Chrysler’s demand crossed the political spectrum. The federal government, which is held by the Conservatives, and Ontario’s provincial government, currently under Liberal control, had signaled a willingness to assist the company. Leading opponents included Tim Hudak, the Ontario Progressive Conservative party leader, and Carol Goar, a prominent columnist at The Toronto Star, a newspaper that generally opposes Mr. Hudak and all other Conservatives.Both support and opposition to Chrysler’s demand crossed the political spectrum. The federal government, which is held by the Conservatives, and Ontario’s provincial government, currently under Liberal control, had signaled a willingness to assist the company. Leading opponents included Tim Hudak, the Ontario Progressive Conservative party leader, and Carol Goar, a prominent columnist at The Toronto Star, a newspaper that generally opposes Mr. Hudak and all other Conservatives.
Jane McKenna, one of Mr. Hudak’s members in the provincial Parliament, said that the company’s retreat underscored her party’s call for an end to corporate assistance.Jane McKenna, one of Mr. Hudak’s members in the provincial Parliament, said that the company’s retreat underscored her party’s call for an end to corporate assistance.
“It’s great news that they’re not going to be borrowing another $700 million,” she said in an interview. “But where, exactly, did they find that money? In the cup holder of the minivan where they keep the change?”“It’s great news that they’re not going to be borrowing another $700 million,” she said in an interview. “But where, exactly, did they find that money? In the cup holder of the minivan where they keep the change?”
Eric Hoskins, the minister of economic development in Ontario, welcomed Chrysler’s decision, adding that his government “will continue to work positively and proactively with Chrysler and with other auto companies to partner in a fiscally responsible way.”Eric Hoskins, the minister of economic development in Ontario, welcomed Chrysler’s decision, adding that his government “will continue to work positively and proactively with Chrysler and with other auto companies to partner in a fiscally responsible way.”
Unifor, the union formerly known as the Canadian Auto Workers, said that while it was pleased by Chrysler’s investment plans, it regrets that the company felt it necessary to withdraw its request.Unifor, the union formerly known as the Canadian Auto Workers, said that while it was pleased by Chrysler’s investment plans, it regrets that the company felt it necessary to withdraw its request.
“Our leaders need to understand the importance of developing a long-term strategy, including public investment, if we want to have a strong, competitive advanced manufacturing sector,” said Jerry Dias, the union’s national president.“Our leaders need to understand the importance of developing a long-term strategy, including public investment, if we want to have a strong, competitive advanced manufacturing sector,” said Jerry Dias, the union’s national president.