Saturday, October 25, 2014

Chrysler reversal rooted in ‘politics’

TORONTO—Ontario said it was blindsided by Chrysler’s abrupt decision to bail on a potential deal that could have seen hundreds of millions of government dollars invested in two of its plants—a move that could hurt the province’s hard-hit auto industry.
Chrysler Canada had asked Ontario and Ottawa for a reported $700 million as part of a $3.6-billion investment in its Windsor and Brampton facilities, saying other jurisdictions like Mexico had approached it about their expansion plans.

Nothing had been finalized but talks between federal, provincial, and Chrysler representatives were going well, Premier Kathleen Wynne said yesterday.
She had no idea Chrysler had changed its mind.
“I was very taken aback by the letter I received yesterday morning [Tuesday],” Wynne said.
“I was taken aback because in all of the conversations with my officials—which were daily, because obviously this is a very important issue for us—I had no warning that that was going to happen.”
Chrysler still plans to invest in Brampton and Windsor, including a new minivan assembly line. But it has withdrawn its request for government funds because it said the issue had become a “political football.”
The federal Conservatives piled on, blaming the “political dynamic” in Ontario for Chrysler’s decision—implicating their provincial cousins and exposing what appears to be some discord within the Tory family on providing public dollars to big corporations.
Ontario Progressive Conservative leader Tim Hudak, who’s itching for an early election, recently condemned Chrysler’s request for government cash as “ransom” and “corporate extortion.”
The province could be plunged into an election as soon as this spring if the minority Liberals table a budget that doesn’t satisfy at least one of the opposition parties.
“If there’s any political football going on at all, it’s not coming from the government,” said Ontario Economic Development minister Eric Hoskins.
“It’s coming from one person and one party—the quarterback of the PC party,” he charged.
Jerry Dias, national president of Unifor, which represents more than 39,000 autoworkers, said Chrysler told him that it didn’t like its name dragged through the mud by Hudak.
“They were really furious about it . . . that somebody like Hudak may very well be the premier, and what does that mean about the long-term investments that they’re planning on making,” he said.
“This is a situation where they’re going to need ongoing support,” Dias added. “So they were really spooked.”
Conservatives dismissed it as a lot of hot air—incredulous that Hudak’s comments two weeks ago would change a multinational company’s mind about a government handout.
Hudak said he was happy to hear that Chrysler wasn’t coming to taxpayers for money that it apparently didn’t need.
“At the end of the day, how do you attract jobs?” asked Hudak.
“You get taxes down. You get energy rates under control.
“You make sure you have a pro-business government that knows you need to create jobs,” he stressed.
Dias said Chrysler also was frustrated with the pace of talks with government officials, but didn’t specify which level.

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