Chrysler Minivans to Stay in Ontario; Government Aid Request Withdrawn

Chrysler will build its next-generation minivans in Windsor, Ontario, but the company will preserve options to change that if the labor and government environment isn’t sufficiently competitive in the long term, CEO Sergio Marchionne said.

The automaker is placing an onus on Canadian unions and government to help reduce costs so they are competitive with other sites across North America. If they aren’t, management will reassess.

The announcement came hours after Marchionne told reporters in Geneva that he made his decision about the minivans.

Marchionne also said production of updated models of Chrysler 300, Dodge Charger and Challenger will stay at its Brampton, Ontario, factory outside Toronto. Some of the updates will be in the market later this year.

In a surprise move, Chrysler withdrew a request for $700 million in financial subsidies from the Canadian federal and Ontario provincial governments – requests Marchionne had said were key to keeping production in Canada.

“It is clear to us that our projects are now being used as a political football, a process that … ultimately will not be to the benefit of Chrysler,” the company said in a release.

Canada’s Liberal and Progressive Conservative party leaders were fighting in the media over whether government should help a private company such as Chrysler.

“As a result, Chrysler will deal in an unfettered fashion with its strategic alternatives regarding product development and allocation,” the statement said.

The statement said the 2016 negotiations with UNIFOR, the labor union formed through the merger of the Canadian Auto Workers and the Communications Energy and Paper Workers, will be “of particular importance for this evaluation.”

“Our commitment to Canada remains strong,” said Marchionne, who grew up in Canada, went to school in Windsor and still has family in Toronto.

“It is my sincere hope that all stakeholders involved commit to do what they can to preserve the competitiveness of the country, and in particular of the province of Ontario,” he said. “We will do what we can to preserve and nurture the competitiveness of our operations, but we reserve the right to reassess our position as conditions change.”

Also in Geneva, Marchionne said Fiat Chrysler Automobile will release its first multi-year plan for the new company on May 6 in Detroit. When Fiat and Chrysler first became equity partners in 2009, the Chrysler side of the merged company held a day-long briefing for analysts and media to present the company’s first five-year plan.