Chrysler status in Ontario conditional

Chrysler says it’s turning down $700 million dollars in government grants and loans — cash it said it needed to offset higher wages in Canada.

Saving $700 million of taxpayers money sounds initially like a good thing. But it could be a very bad thing in the long run for Ontario’s auto industry.

The money that Chrysler Canada was looking for was about $720 million. They need roughly $3.5 billion to refurbish plants in Windsor and in Brampton. They’ve been negotiating with the province and the federal government for some time now. The number being discussed was $700 million. Now it looks as though Chrysler is going to have to find that money by negotiating with Unifor. That comes up in 2016. They’d be looking for up to $20 more in concessions.

Chrysler representatives said that it would be fair to characterize their commitment to Canada as ‘conditional’ on what they can do to remain competitive here in Ontario.

There are plants in Alabama and Tennessee and in Mexico. Governments in those juristictions are offering hundred of millions of dollars to lure automakers to those locations.

In the short term, Chrysler has said it will put money into both Windsor and Brampton to continue minivan production as well as the Chrysler 300, Dodge Charger and Challenger series.

In the long term, they says they reserve the right to look elsewhere if market conditions determine that they should.