Canada:Ontario Liberals urged to give Ford aid
Ontario Globe and Mail
By GREG KEENAN
The new Ontario government must provide enough financial assistance to Ford Motor Co. to make sure the auto maker invests more than $1-billion to revamp its Oakville, Ont., manufacturing operations later this decade, union and auto industry officials say.
“It's absolutely crucial” that Canada win the Ford investment, said Buzz Hargrove, president of the Canadian Auto Workers union.
These negotiations will be the first key test of the government's role in maintaining and nurturing the auto industry, which provides one in six jobs in Ontario, Canada's most populous province.
“I think the Ford investment is very important,” said Gerry Fedchun, president of the Automotive Parts Manufacturers Association of Canada. “It will set the tone.”
Both he and Mr. Hargrove see the Ford investment as critical because the lion's share of the new assembly investments and the thousands of spinoff jobs that accompany them have been going in recent years to the southern United States.
Sharing that opinion is Mark Nantais, president of the Canadian Vehicle Manufacturers Association, a lobby and trade group for Ford, DaimlerChrysler Canada Inc. and General Motors of Canada Ltd.
“It's absolutely critical that we keep what we have here, not to mention expanding it,” Mr. Nantais said.
While new plants have opened in Alabama and Mississippi in recent years — some in Alabama are already expanding — Canada's assembly industry has shrunk with the closing of plants by GM in Quebec and DaimlerChrysler in Windsor, Ont., and one by Ford set for next year.
“If you lose a third assembly plant with no new investment, you're going in the wrong direction,” Mr. Hargrove said. In addition, Canada lost out on a major project earlier this year when DaimlerChrysler decided not to build a new plant in Windsor.
Canada has also missed out on the southern U.S. investments, but both Honda Motor Co. Ltd. and Toyota Motor Corp. have expanded their Canadian operations in recent years, to the point where they now employ more than 7,000 Canadians at their assembly operations here.
Ford's Ontario Truck Plant is scheduled to close next year.
However, the auto maker has proposed a massive redevelopment of its Oakville site that would include turning its other factory there, the Oakville Assembly Plant, into a leading-edge flexible manufacturing facility.
Senior Ford officials have said publicly that they expect the government to provide as much as $200-million in financial help for the project, which could amount to an investment of more than $1-billion for the company.
That position has not changed, John Jelinek, vice-president of public affairs for Ford Motor Co. of Canada Ltd., said yesterday.
“We're still putting together our business case to take both to our [parent] company and the governments in Ottawa and here in Ontario,” Mr. Jelinek said.
But the key issue for Mr. Fedchun is one that parts makers and Mr. Hargrove have identified for more than 18 months — what financial incentives are Alabama, Mississippi and others offering to lure auto makers and how much must Ontario and Canada offer to match them?
Tax policy is critical, Mr. Fedchun and Mr. Nantais argued.
The Liberals should not reverse the reduction of the capital tax proposed by the previous government, Mr. Fedchun said.
“It's an impediment to investment,” he said.
However, reversing corporate tax cuts was one of the Liberal Party's campaign promises, as was contributing $100-million annually to a fund designed to attract new automotive investment.
Mr. Hargrove said he thinks the Liberals understand the importance of the industry to Ontario and argued that they're more pragmatic and less ideologically driven than former Progressive Conservative enterprise minister Jim Flaherty, whose consistent public posture was that government should not give money to corporations.
Industry analyst Dennis DesRosiers, president of DesRosiers Automotive Con******ts Inc., said that if the government has to hand over cash to win the Ford investment, so be it, but it should also focus on ways to improve the parts industry and win more research and development jobs from both vehicle makers and parts manufacturers.
Another key issue the new government will have to address is the border situation at Windsor, which is the choke point for parts travelling to assembly plants in Canada from the United States and vice-versa.
Several proposals are on the table to improve the infrastructure in the Windsor-Detroit area, but division among local politicians are contributing to delays in deciding on a solution.
“We've got to get moving forward on that,” Mr. Fedchun said.
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.....