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Stacy94PGT · 05-13-2004, 12:27

Ford mum on deadline for Ottawa aid

Reuters / May 13, 2004

TORONTO -- A major revamp of Ford Motor Co. of Canada's Oakville, Ontario, plant is still contingent on government financial aid, but the automaker declined on Thursday to say if it had given Ottawa a deadline to make a commitment.

The Globe and Mail newspaper said Ford gave Ottawa until Friday to commit about C$100 million ($72 million) to a possible revamp of its Oakville plant or risk losing the C$1 billion investment.

Ford is considering transforming the plant into a flexible manufacturing facility that can make multiple models but has long said any decision depends on at least C$200 million in financial help.

"We're putting together our business plan for Oakville and that includes government commitments to invest," John Jelinek, a spokesman for Ford Canada, said at the U.S. automaker's annual meeting in Kentucky. He declined to comment on the deadline report.

Buzz Hargrove, president of the Canadian Auto Workers union, said the reported deadline is consistent with the May 14 date Ford has given the union to work out labor issues about how it would operate such a plant.

"I don't know for certain other than that it happens to be the same as they've said to us that (there) has to be a deal on our issues," Hargrove said.

"What they've told the CAW is if they don't have an agreement with us by tomorrow then they're going to move on and talk to others who might be interested in doing this plant."

Ford spokesman Lauren More, who said discussions with the government were confidential, said the Canadian unit did not face an internal deadline to present a business case to the head office.

"There's been no timeline put on it," she said, adding the proposal has several different components -- government, labor and corporate -- that need to be aligned.

"We just continue to work on the business case and advance each of those components."

Last month, Ontario said it would invest C$500 million in the auto industry. The fund can be tapped for 10 percent of a project's cost up to C$100 million and is designed to support advanced technical training and improve infrastructure.

That could cover some of the financial help Ford wants, leaving Ottawa on the hook to pony up the rest.

Hargrove said the union has been lobbying Ottawa to deliver the funds, saying losing the project would send a bad signal and potentially cost the country other projects.

He said Ontario's auto investment, coupled with a more receptive audience in Ottawa under Prime Minister Paul Martin's government, may trigger a deal for the plant.

"All these things point to what should be a very positive response here, but politics being what it is, who the hell knows," he said.

The possibility of retooling the Oakville assembly plant, which makes the Ford Freestar and Mercury Monterey minivans, later in the decade was raised during contract talks in 2002 between the automaker and the Canadian Auto Workers. Ford will close the adjacent pickup truck plant this summer.