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Canada:Ford wants government help

From Thursday's Globe and Mail

Toronto and Ottawa — Ford Motor Co. of Canada Ltd. is preparing to go to the federal and Ontario governments in a matter of weeks to seek financial help for its plan to redevelop its Oakville, Ont., operations, which would help secure at least 3,000 jobs and perhaps create thousands more.

Industry sources said the company's parent, Ford Motor Co., has allocated two new sport utility vehicles to Oakville in the 2006-07 time frame and hopes to turn the plant into its first Canadian flexible facility. Such a move would transform the operation into a leading-edge plant that would be able to react more quickly to the rapid changes in automotive tastes.

The auto maker is likely to ask for about $200-million of a total $1-billion cost to redevelop its Oakville facilities, according to sources familiar with the auto maker's plans, who described the investment as Canada's to lose.

Ford Canada president Alain Batty "is holding Canada's feet to the fire," said one industry source. "Do you want the jobs or don't you?"

The Ford plan is regarded as critical to the auto industry's future in Canada because sufficient support from governments would be a signal that they are willing to offer enough financial assistance to entice auto makers to continue investing here.

It takes on added importance because another project earmarked for Canada disappeared last year when DaimlerChrysler AG decided not to go ahead with a flexible plant in Windsor, Ont. DaimlerChrysler sought more than $300-million from governments and was offered what appeared to be sufficient financing, but walked away because of market struggles and cancellation of the vehicle program slated for the plant.

The Canadian Auto Workers union and senior parts industry executives have urged Ottawa and Ontario to offer money to compete with Alabama, Mississippi and other southern states that have lured auto makers with hundreds of millions of dollars in incentives in recent years.

Ford's original plan for the two SUVs--code-named U387 and U388--was to assemble them at a plant in Atlanta, but they were shifted to Oakville, then back to Atlanta and now again to Oakville amid a continuous reassessment of the company's future product programs. The sources cautioned that plans could change again.

It now appears, one industry source said, that Ford has decided that it has enough new vehicles under development to give Atlanta new work as well, instead of potentially closing that plant when production of the Ford Taurus and Mercury Sable mid-sized cars there ends later this decade.

John Jelinek, Ford Canada's vice-president of public affairs, would not comment yesterday on timing or on new vehicle programs.

"We are still working on advancing our business case," Mr. Jelinek said. "The ball is clearly in our court."

Ontario Economic Development Minister Joe Cordiano said last week that he's optimistic about landing the Ford project, citing the province's advantages, such as a skilled work force and taxpayer-financed health care system.

The project is "very important," said Mr. Cordiano, who added that he has toured the plant and met with Ford Canada officials. "There are significant jobs at stake there."

Ford Canada is also anxious to meet with federal Industry Minister Lucienne Robillard and has spoken to federal government officials about the project but cabinet is preoccupied with the sponsorship scandal and the pending election.

"We're aware that Ford is thinking along those lines," one source said.

There's little doubt that Ford is beyond simply exploring the idea, this source said.

"I get the feeling they're quite committed -- they have a fairly ambitious proposal."

Flexible manufacturing involves building multiple models off the same vehicle chassis -- or basic underpinning of a vehicle. Auto makers are turning existing factories into flexible plants or building new flexible operations so that they can shift more quickly to changing market trends.

The concept also allows them to adjust to one of the emerging realities in the North American market, which is the fragmentation of traditional passenger car and truck segments into dozens of smaller segments such as car-based SUVs that combine the ride of a car with the utility of an SUV and sport utility trucks that are essentially SUVs with a pickup truck box.

The vehicles headed for the company's Oakville Assembly Plant -- which now makes Ford Freestar and Mercury Monterey minivans -- are so-called crossover utility vehicles.

The possibility of the investment at the site arose first in 2002 when the CAW agreed not to go on strike to try to block the shutdown of the neighbouring Ontario Truck Plant in return for the company agreeing to consider a flexible plant in Canada.

If the Oakville proposal goes ahead and Ford duplicates what it's doing at a plant in Chicago, it could create a supplier park for parts makers near the assembly plant, which would mean hundreds, perhaps thousands, of new jobs.

My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.

My next Ford.....
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