USA: Chrysler cans Canadian pickup plant - paper
DaimlerChrysler has cancelled plans to build a $US1.5 billion pickup assembly plant in Windsor, Ontario, Canada, the New York Times (NYT) reported. The complex would have included an assembly plant and several factories built on the grounds by suppliers who would have been responsible for manufacturing functions like assembling the chassis or painting the vehicles, sending parts to the assembly plant just when they were needed, keeping inventory to a minimum and lowering costs, the paper added.
The New York Times said the decision is a blow for Canada, which has been trying to attract new automotive investment but has lost out on several recent plant projects, which went to sites in Mexico and the southern United States. The last new assembly line built in Canada, at a Honda plant in Alliston, Ontario, opened in 1996, and Canadian plants' share of new vehicles sold in North America has fallen to about 12% from 15.9% in 1999, the newspaper noted.
According to the New York Times, Chrysler chief executive Dieter Zetsche reportedly said that the decision to shelve the Windsor project was forced on the company by intensifying competitive pressure and an excess of manufacturing capacity in North America. "It would not have been responsible to make any other decision," reportedly said, adding, "We had to face reality."
The newspaper said Canadian Auto Workers Union head Buzz Hargrove claimed the Canadian government and the province of Ontario were to blame because they did not provide enough financial support. "Chrysler needs this product; they want this product," Hargrove reportedly said, referring to the line of pickups the plant would have built. "If you put enough money on the table, you can make this a viable project."
The New York Times said DaimlerChrysler had asked the provincial and national governments for a package of incentives totaling $Can350 million ($US259 million) and that Zetsche said the company was "very satisfied with their contribution and their willingness to come to the party to try something new."
The New York Times said the sporty pickup model intended for the Windsor complex would have been sold under the Dodge brand and marketed toward young first-time buyers.
"From Day 1, we said this will be a very difficult business case because of the customers we're trying to attract and their buying power," Zetsche reportedly said, according to the New York Times.