The last decade hasn’t been kind to Ontario’s manufacturing sector, and in particular to the province’s automobile industry, so Chrysler’s news on Monday is indeed welcome.
The company will spend approximately $2 billion to re-tool its assembly plant in Windsor, an investment that underscores the American carmaker’s faith in its continued Ontario operations, and its commitment to building vehicles in Canada.
The plant has been selected to build Chrysler’s all-new minivan – which shouldn’t be a surprise, since the corporation has been building the popular vehicle at its Windsor plant for over 30 years.
But such corporate history is never a guarantee that things will continue as they have. General Motors has reduced its assembly activity in Oshawa and is hinting at further reductions, and the Ford Motor Company’s presence in Windsor is miniscule when compared to its activity decades ago. Of course, Ford is very busy at its Oakville plant, and is in the midst of an expansion and the hiring of additional workers for that facility.
There are other auto companies, too, that have invested heavily in Ontario. Honda and Toyota have, between them, spent billions of dollars in this province. Toyota has been building vehicles at Cambridge for 30 years; it opened its second assembly plant, at Woodstock, just seven years ago.
But as with all business ventures, Chrysler’s continued commitment in Ontario remains a risk for the corporation and its shareholders, but it’s a risk that has been softened within the last several months because of a falling Canadian dollar. Chrysler’s executives couldn’t predict with certainty the dollar’s exchange rate with its American counterpart, and they can’t be certain about the future, either. But, for now, their investment would appear to be a sound business decision.
CEO Sergio Marchionne said as much on Monday in Detroit, and added that “favourable economics in terms of demand” will determine if the Windsor plant is also given the opportunity to build another vehicle.
It’s also a decision not based on government support. Chrysler initially sought assistance from the provincial government, but the subject became a political football in early 2014. Marchionne, to great surprise, retracted his plea for assistance, leaving some to worry that Chrysler might bail on Windsor.
But he and his company haven’t.
Chrysler’s faith in Ontario doesn’t necessarily mean that this province can expect a restoration of its once-fabled manufacturing sector, but it does mean that manufacturing in Ontario, even in 2015, remains a viable and sustainable venture; and that this province’s varied social and infrastructure assets remain highly attractive within a competitive global economy.