Ford wants aid for new plant
By GREG KEENAN
From Friday's Globe and Mail
Toronto Ford Motor Co. will need at least $200-million in financial help from Canadian governments to go ahead with an investment of $1-billion to revamp its massive operations in Oakville, Ont., says Jim Padilla, president of Ford North America.
"We're talking about a big investment," Mr. Padilla told a small group of reporters Thursday. "We'll be north of $1-billion for [the] proposal we're talking about."
Governments will have to chip in at least 20 per cent of the cost he said the investment could be as much as $1.2-billion to help Ford construct a flexible manufacturing plant at the Oakville site.
The help could consist of infrastructure, training money and tax breaks over a 10-year period, Mr. Padilla said.
Both Ontario and Ottawa have said they are prepared to help auto makers with infrastructure improvements and provide training money, but not cash. It's not clear if they define tax breaks as cash and a spokesman for Ontario's Enterprise Minister Jim Flaherty has dodged the question when asked.
Mr. Padilla's case for aid, made at a luncheon at the Canadian International Auto Show in Toronto, comes amid intense negotiations between the two governments and DaimlerChrysler Corp., which wants financial help for a new plant in Windsor, Ont.
DaimlerChrysler is seeking more than $300-million in help from Ontario and the federal government in discussions that Ford is watching intently as it considers the future of the Oakville operation in the latter half of the decade.
Mr. Padilla's comments increase the pressure on the two governments to satisfy DaimlerChrysler.
He was asked what signal would be sent if the answer to DaimlerChrysler is no.
"That answer tells me that they don't want to be competitive," he declared.
"If they don't do it for Chrysler, they aren't going to do it for anyone else."
That could also close the door on new investment by Toyota Motor Corp., which has begun searching for a site for a seventh North American assembly plant, and Mitsubishi Motors Corp., which has had discussions with the federal government about building an assembly plant in Canada.
Mitsubishi Motors North America Inc. president Pierre Gagnon said Thursday that a new plant is one of three options the auto maker is considering as a means of boosting assembly capacity in North America.
Ford needs government help because such offshore-based rivals as Toyota, Honda Motor Co. Ltd., and others are getting government help to set up new assembly plants, he said.
He acknowledged that Ford is also receiving government assistance in the United States, including $120-million (U.S.) announced recently to move production of the Mustang sports car from Dearborn, Mich., to Flat Rock, Mich.
"That's not even on the high end of what people are willing to do," he said.
The highest amount so far appears to be $320-million that Georgia has offered DaimlerChrysler AG to build a commercial van plant. DaimlerChrysler has not confirmed yet that it will build the plant in that state.
Ford also received money to retool its massive and aging Rouge River factory once company founder Henry Ford's showpiece and once the largest industrial complex in the world.
Michigan doled out $222-million to help the auto maker retool it at a cost of $2-billion. Production of the redesigned F-series pickup truck will begin in Dearborn later this year.
The flexible plant will be able to produce nine different models off three separate vehicle platforms the chassis, or underbody of a vehicle.
The auto maker is also revamping an existing plant in Chicago to turn it into a flexible facility. A nearby supplier park will create 1,000 new jobs nearby, Mr. Padilla said. "That's the type of thing that might be a possibility for an Oakville campus type of proposal," he said.
Alain Batty, president of Ford Motor Co. of Canada Ltd., also made a pitch for government help as he unveiled the new Ford Freestar minivan, which is manufactured in Oakville. The new minivan was introduced after a $600-million (Canadian) renovation of the Oakville Assembly Plant.
"We are building our business case for bringing a state-of-the-art flexible manufacturing plant to Oakville," Mr. Batty said.
Mr. Padilla said the cost of a body shop alone for a flexible plant would exceed what the auto maker spent on the Freestar.
He also said the company's sales and marketing operations in Canada lost money last year, the first public comment by a senior Ford official on the profitability of the Canadian operations.
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.....