Fiat Chrysler CEO Sergio Marchionne had weighed in with criticism of ruling Conservative leader.
With growing concerns about the economic viability of producing cars and car parts in Canada, an unexpected upset in provincial elections may wind up keeping makers like General Motors, Ford and Toyota — as well as numerous parts makers — from fleeing the country.
There’s been a sharp divide over aid for the auto industry, but as the dust settles after the vote in Ontario, Chrysler could turn out to be the most immediate winner. A proposed $2 billion package for the maker had been put on hold, and possibly scuttled as a result of a political controversy leading up to the election.
How that will play out for the rest of the auto industry operating North of the Border remains to be seen, but observers warn that with the Canadian currency running close to par with the American dollar in recent years, it is becoming increasingly difficult for automakers to justify continuing operations that may suffer from serious cost penalties.
That’s of particular concern in Ontario, where General Motors, Ford, Chrysler, Toyota and Honda all operate assembly plants, along with numerous suppliers. Industry leaders are hoping the surprise victory in provincial elections by the Liberal Party – a traditional proponent of industry aid – could tip the economic scales in favor of keeping open those factories which produce more than 1 million vehicles annually.
(Canadian auto workers push to unionize Toyota. Click Here for the story.)
Chrysler has hinted it might consider other options, and it isn’t alone. A growing number of makers have shifted production not only to the U.S., but to the rapidly expanding network of car plants popping up across Mexico.
How much of a role the auto industry played in the Ontario elections is unclear, but Tim Hudak, the leader of the Progressive Conservatives, has been an outspoken opponent of any kind of governmental assistance. Only last month, Hudak took credit for deraling Chrysler’s request for $700 million from the federal and Ontario provincial governments, according to The Toronto Star.
Hudak’s opposition to what he described as “corporate welfare” a position Fiat Chrysler Automobiles CEO Sergio Marchionne decried as “inflammatory, irresponsible and unhelpful.”
Hudak had shrugged off the criticism, arguing that Chrysler was ready to go ahead with future plans for several of his factories, including the minivan plant in Windsor, across the river from Detroit. But Chrysler also had held off making a commitment to reinvest in its plant in Brampton, Ontario.
(NHTSA probes possibly faulty recall repairs at Chrysler. Click Here for the story.)
That may have given momentum to his key rival, Kathleen Wynne, the new leader of the Liberal Party, who pulled off what Canadian commentators are calling an upset by running hard to the left. The Liberals gained 10 additional seats in the Provincial parliament for a majority. Hudak, in turn, announced his resignation from his party leadership post.
The vote coincides with a renewed push by the labor conglomerate Unifors, which now represents Canadian autoworkers at GM, Ford and Chrysler plants, and which is hoping to pull off an upset of its own by organizing workers at Toyota’s operations.
“Ontario voters sent a clear message…that they want an Ontario with good jobs, strong public services and healthy communities,” said Jerry Dias, Unifor’s president, and an active opponent of the Conservatives.
(Cindy Estrada named first female chief UAW negotiator, setting up a battle with first female CEO Barra. Click Here for the story.)
(Paul A. Eisenstein contributed to this report.)