July 14, 2011 / 4:43 PM / in 6 years

Ford Canada eyes plant upgrade, Ontario supportive

VANCOUVER (Reuters) - Ford Motor Co of Canada has discussed future investments in a vehicle assembly plant near Toronto with the governments of Canada and Ontario but has not officially requested financial support, the company’s CEO said on Thursday.

Ontario’s minister of economic development and trade, Sandra Pupatello, confirmed that a proposed retooling of the Oakville plant, west of Toronto, had come up in ongoing talks. She would not comment on the specific project but said generally the province is prepared to offer financial support to keep the automotive sector competitive.

“We’re very interested in keeping this sector very healthy and we know that it is a competitive world out there, that other jurisdictions are prepared to spend far more than we ever have to create an industry,” she told Reuters.

“What we do is do everything we can to help keep ours on the cutting edge,” she said.

The Globe and Mail newspaper reported on Thursday that Ford has approached Ottawa and Ontario for financial assistance to retool the Oakville plant to broaden the types of vehicles it can manufacture.

The paper, quoting an unnamed source, said the project could cost between C$500 million ($521 million) and C$1 billion.

“We meet as a company regularly with government officials,” Ford Canada CEO David Mondragon said, adding that talks have included Ford’s desire to assemble other vehicles in Canada that it can sell internationally.

The Oakville plant currently produces crossover utility vehicles, including the Ford Edge, but the company has spoken for the past two years about the possibility of broadening its output to incorporate a so-called global vehicle platform.

“Our plan is to move forward with further conversations with the government but we don’t have an exact time line,” Mondragon told Reuters.

He said any cost estimate was “premature”.

Pupatello said any potential provincial funding would likely be conditional on the federal government also pitching in.

“That’s been our history and ... the sheer size and scope of these projects -- they’re so large -- that it behooves a sub-national government to need help from our federal counterpart,” she said.

Federal officials were not immediately available for comment.

Earlier this month, Ottawa and Ontario pledged to each invest C$70.8 million to upgrade Toyota Motor Corp assembly plants in southern Ontario.

The auto manufacturing sector is a large employer in Ontario, Canada’s economic heartland, which is slowly recovering from the battering it took during the 2008-09 recession.

($1=$0.96 Canadian)

Reporting by Nicole Mordant in Vancouver and Louise Egan in Ottawa; editing by Peter Galloway and Rob Wilson

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