The cash-strapped Ontario government is prepared to invest more money in the auto sector to help car companies respond to a strong sales recovery, Premier Dalton McGuinty says.
“They are in a sense our leading goal scorer,” Mr. McGuinty told reporters Tuesday. “They put the puck in the net over and over again on behalf of the Ontario economy. We need to find ways to ensure that they remain healthy.
Mr. McGuinty made the comments after speaking to a business audience at the Bloomberg Canada Economic Summit in Toronto.
He was responding to a Globe and Mail report about a study done for the federal government that said the Detroit Three auto makers could run short of vehicle-making capacity later in the decade after slashing capacity deeply during the 2008-2009 recession and auto crisis.
The need to increase capacity by 2018 comes as Ottawa and the Ontario government assess a Ford Motor Co. plan to spend $1.2-billion to upgrade its Oakville, Ont., plant to assemble vehicles based on a global platform. The auto maker wants financial assistance for the project and has said it will not go ahead unless there is government support.
Based on the 20-per-cent financing level the two governments provided for the retooling of that plant in 2005-2006, the auto maker is seeking at least $240-million in financial help for the global platform.
Mr. McGuinty said he will look at whether his government should “deploy our limited business supports” in the auto sector, which is a key pillar of Ontario’s battered manufacturing sector and is bouncing back so strongly that Ford, its Detroit rivals and other auto makers are boosting production as quickly as possible.
The Detroit Three slashed production capacity by 2.6 million vehicles in 2008-2009 and now they’re struggling to meet demand that is recovery more quickly than their ability to meet it.
Ford said Tuesday that the usual two-week summer shutdown will be cut to one week at U.S. assembly plants and seven North American engine and transmission factories – including the Essex Engine Plant in Windsor, Ont. – as it tries to crank out more cars and trucks.
Those moves will boost production by 40,000 vehicles during the third quarter, Ford said.
Ford operated its North American assembly plants at 108 per cent of capacity during the first quarter.
“This is a great kind of a problem to have,” Mr. McGuinty said. “They’re telling us that we need to produce more cars, so we’ll have an opportunity to consolidate if not indeed enhance our standing as the No. 1 producer of cars in North America.”
The auto sector has grown in Ontario and retained its pre-eminence even in the “darkest days of the recession,” Mr. McGuinty said, because his government has worked hand in hand with it.