October 24, 2014 / 5:21 PM / 5 years ago

UPDATE 2-Ford rejects push for investment in Ontario plants -union

(Adds comment from Industry Minister spokesman)

By Susan Taylor

TORONTO, Oct 24 (Reuters) - Ford Motor Co has rejected a pitch to make a new investment in its Windsor, Ontario, plants and decided to put the money in Mexico as the company originally planned, the head of Canada’s main auto workers’ union said on Friday.

Unifor President Jerry Dias called the decision a significant blow, saying the program would have stabilized the Windsor operation for a decade, bringing a new engine program to the facilities.

“This was a project that was earmarked for Mexico and we tried to have it diverted to Canada,” he told Reuters. “We were close, but just couldn’t get it over the finish line.”

In a release, Unifor said the program would have created 1,000 new jobs in Windsor, a Canadian auto manufacturing hub located just across the border from Detroit. The Globe and Mail reported on Friday that the investment could have been about C$2 billion ($1.8 billion).

Ford said in a statement that for competitive reasons, it would not disclose its future manufacturing or product plans.

But a spokesman for Industry Minister James Moore said that Ford asked both the federal and provincial governments for funding.

“After weeks of discussions, it was determined that the terms laid out in Ford’s proposal were not in the best interest of Canadian taxpayers,” said spokesman Jake Enwright.

“We support projects that secure high-value jobs and deliver long-term economic benefits to Canada and the terms laid out in Ford’s proposal did not meet those objectives.”

In late August, union leaders told local media that they had started discussing new investment in Windsor.

Mexican plants can have much lower costs, but Canadian unions often argue that their workers are skilled and experienced, and building a new facility is typically more expensive than upgrading an established site like Windsor.

Unifor, Canada’s largest private-sector union, has urged Ontario and Canada’s federal government to do more to support manufacturing.

On Oct. 1, Ford said it was adding 1,000 jobs at its Oakville Assembly, west of Toronto, which will produce the 2015 Ford Edge crossover utility vehicle. Last year the company announced a C$700 million investment in the Oakville plant. ($1 = 1.12 Canadian dollars) (With additional reporting by Bernie Woodall in Detroit and Leah Schnurr in Ottawa; Additional writing by Allison Martell; editing by Jeffrey Hodgson, Lisa Von Ahn and Matthew Lewis)

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