Marchionne defending request for incentives


Fiat Chrysler chief Sergio Marchionne has written an editorial for the Globe and Mail in which he makes the case for taxpayer investment into Chrysler operations and calls out the “self-proclaimed experts” that have sought to demonize Chrysler’s contemplated investment in its Windsor and Brampton assembly plants.

The piece, which is published in Wednesday’s edition, noted how Canada has struggled to hold on to its manufacturing competitiveness as evidenced by manufacturing closures and the fact that over the past five years there have been $42-billion of automotive investments in North America, while only $2.4-billion of that has been invested in Canada.

“Clearly, our ability as a country to retain and attract manufacturing investments is severely challenged. During this same period, Chrysler has steadily grown its operations and has remained very much committed to Canada,” Marchionne wrote.

The uncharacteristic move follows some sharp criticism regarding Chrysler’s request that the Canadian federal and Ontario provincial governments come to the table with economic incentives to help cover the cost of a multibillion dollar plan to update the aforementioned facilities.

Marchionne, who opened media day at the Canadian International AutoShow on Feb. 13, was greeted with a series of pointed questions from reporters at the show regarding the request for government incentives and previous reports in which he indicated the automaker might take its business elsewhere.

Previous reports indicate the automaker is seeking as much as $700 million from both levels of government.

“The automotive industry is a global industry. In the Canadian market, there are 20 global automotive companies from around the world who compete for sales. Of these 20 companies, only five build automobiles in Canada,” his column read.

He continued by pointing out that one of those five companies is Chrysler Group LLC.

“In 2013, Chrysler built 570,000 vehicles in Canada, which represented approximately 25 per cent of the country’s total automotive manufacturing output. The company began 2014 as the No. 1 seller of vehicles in Canada. Perhaps more importantly, Chrysler supports Canada – we directly employ 10,000 people, annually purchase more than $3.2-billion from Canadian suppliers and pay several hundreds of millions in annual taxes,” he wrote.

His column even referenced the loans Chrysler received from the federal and Ontario governments in connection to its 2009 restructuring noting the automaker is equally proud of the fact that it fully honoured its commitments on those loans and repaid them six years ahead of schedule.

“While it is true that there were other loans made to the Old Chrysler company pre-bankruptcy, it is equally true that new stakeholders in Chrysler Group LLC and its management did not have any direct say in the amount or the purpose of these pre-bankruptcy loans, and it would thus be inequitable to hold them liable or responsible for their repayment.”

“It is unfortunate to read how some self-proclaimed experts have sought to demonize Chrysler’s contemplated investment. The shame in all of this is the fact that virtually all of the automotive companies who invested more than $40-billion in Mexico and the United States over the past five years never even bothered to ask Canada if it was interested in helping to bring these investments and jobs to Canada.”

A decision on the investment is expected to be made sometime in March.