Ontario premier says $85.8 million grant for Chrysler is not corporate welfare

A worker installs parts on the production line at Chrysler's plant in Windsor, on January 18, 2011. THE CANADIAN PRESS/Geoff Robins
A worker installs parts on the production line at Chrysler's plant in Windsor. CANADIAN PRESS/Geoff Robins

WINDSOR, Ont. — Premier Kathleen Wynne defended the Ontario government’s $85.8 million grant to Fiat Chrysler Wednesday as a smart investment in the future, and insisted it was not “corporate welfare.”

Wynne announced the grant at the Fiat Chrysler Automotive Research and Development Centre in Windsor, saying it would help in production of the new Pacifica minivan, which will be available in two plug-in electric hybrid versions.

“We took a position as a government that we were going to partner with the auto industry, that we weren’t going to fall prey to the notion that partnering with one of our most important sectors was somehow corporate welfare,” she said.

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“There was never any question in my mind that the auto sector is critical to Ontario, and that we have an important role to play.”

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Fiat Chrysler withdrew a request in 2014 for $700 million from the Ontario and federal governments for the Windsor assembly plant after the province’s Progressive Conservatives called it a “ransom demand.”

Last year the automaker said it would spend about $1 billion to retool the Windsor plant, and do it without government money.

However, on Wednesday, Fiat Chrysler Canadian president and CEO, Reid Bigland, credited Wynne with helping the automaker decide to produce the Pacifica in Canada.

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“From an environmental standpoint, it is the support of the Ontario government that is helping to make the world’s first plug-in hydroelectric minivan a reality right here in Windsor Ontario,” said Bigland.

The investment for the Chrysler Pacifica will “safeguard” the Windsor assembly plant, where Chrysler added 1,200 new jobs on top of 4,000 existing positions to produce the minivan, said Economic Development Minister Brad Duguid.

“About $16.8 million of that (grant) will go to the research and development and training,” he said. “And I believe that leaves 69 million that will go towards, to support the investments that Fiat Chrysler has made in the plant.”

Ontario is supporting traditional automaking as well as the high-tech auto manufacturing of the future by helping finance the development of electric and self-driving vehicles, added Duguid.

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“The auto market of the future is in an absolute state of technological disruption,” he said. “Our choice is to either lead that disruption or be swallowed up by it, and our premier has clearly said we’re going to lead it.”

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Wynne crossed into Detroit Wednesday to meet officials from the Ford Motor Co., and with Michigan Gov. Rick Snyder, who said he wants to work with Ontario to promote vehicles produced in the “heart” of North America’s automotive sector.

“I think we can do more together to get the message out to the world that it’s not about the lowest labour cost,” said Snyder. “It’s about having the highest quality products built by great skilled workers, that do great engineering work.”

The premier said the government must partner with global companies if it hopes to convince them to expand and innovate in Ontario.

“How do we leverage this region’s capacity to be that big player in the globe, and it has to do with our willingness to innovate, our willingness to take risks, our willingness to partner with industry,” she said.

“Our message to Ford is that we’re very eager to retain their footprint in Ontario.”

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Ontario’s Liberal government has a long history of providing money to automakers, and teamed up with the federal government in 2009 to contribute $10.6 billion to Chrysler Canada and GM Canada to keep them afloat during the recession.

When Ontario sold its GM and Chrysler shares, it gained about $1.1 billion on its original $4.8-billion bailout package to the two automakers.

Wynne said things are definitely looking up for Ontario’s automotive sector.

Last week, General Motors that it was looking to hire up to 750 engineers in Ontario and would open a new software centre to help develop self-driving cars.

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