There are “question marks” hanging over Chrysler’s Ontario factories after the auto giant walked away from negotiations over a major new investment, Premier Kathleen Wynne says.
And she signalled her government is still ready to put money on the table to keep Chrysler in the province.
The company had offered to pour $3.6-billion into Ontario in exchange for $700-million from the federal and provincial governments. Then on Tuesday, Chrysler unexpectedly dropped its request for cash. The company said it will pay for at least some of the investment itself – including to develop a new minivan platform at its Windsor plant and to continue building the Dodge Charger, Challenger and the luxury 300 in Brampton.
But it is unclear how large this investment will be, or whether the company will stay in the province for the long-term.
“The concern is that there are question marks about the future,” Ms. Wynne said at Queen’s Park Wednesday. “I don’t know that there’s any clarity about what happens after [the next round of Chrysler’s investments]. So I think those are question marks.”
Chrysler itself has said it will “reserve the right” to put its investment where it sees fit, and that its next labour deal with auto-workers’ union Unifor in 2016 will help determine whether it stays in Ontario.
Ms. Wynne left the door open to future negotiations with the auto maker.
“My hope is that we’ll be able to continue to have that discussion. The relationship with Chrysler is not over,” she said. “The relationship with the auto sector remains extremely important in Ontario, so I’m going to continue to try to partner with them in conjunction with the federal government.”
Ontario government sources have said the province and Ottawa were ready to offer Chrysler hundreds of millions of dollars in assistance. And Ms. Wynne said she was surprised that the company withdrew its request, which she only learned publicly on Tuesday morning, a few hours before the decision was made public.
“I was very taken aback, I was very surprised by the letter that I received yesterday morning,” she said. “I don’t know what the future holds and that’s part of what the discussion needs to be, I believe.”
Chrysler CEO Sergio Marchionne has said that he withdrew his request because it had become a “political football” – an apparent reference to Progressive Conservative Leader Tim Hudak, who accused the company of demanding a “ransom” from taxpayers. But at least one analyst has said this was probably not the real reason.
Ms. Wynne said she had no idea why Chrysler walked away from discussions.
Government sources acknowledge that the province wanted guarantees from the company about the amount of investment and the number of jobs it would keep in the province. One source said Chrysler was also very eager to conclude a deal quickly, while the province was focused on doing its “due diligence” – a process that can take some time.
The Premier said it was “an issue” that so much of the talks with Chrysler played out publicly. The company itself made public the fact it wanted money from the government.
“At least part of the issue here is that it’s very difficult to have a successful negotiation in public. It’s a much more coherent process to do that in private and have a frank discussion,” she said.