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Chrysler to invest big in Brampton
Saturday August 1, 2009
- Torstar News Service
Chrysler Canada will announce a new paint shop for its assembly plant in Brampton this fall that could involve an investment of more than $600 million, sources say.
A Chrysler spokeswoman dismissed the idea the struggling automaker had decided on the major investment, but sources said yesterday the company would approve the shop within three months and likely reveal two new models to be made in Brampton.
A new shop would not create more jobs but would boost efficiency and make the plant\'s future more secure. More than 2,000 workers are now employed there.
\"We know it will happen,\" said one source familiar with plans for the plant. \"They\'re planning to replace that shop and an announcement is coming.\"
But Mary Gauthier, an official in Chrysler Canada\'s communications department, said the new company\'s board met for the first time only this week after a major restructuring.
\"It is really premature to start speculating about potential announcements months from now,\" she said. \"We don\'t have a new paint shop to announce at Brampton.\"
Officials for the Canadian Auto Workers could not be reached for comment.
But the union said Chrysler acknowledged in April during contract bargaining for concessions that the plant required additional investment for a paint shop to support \"planned production.\"
Sources say Chrysler negotiators could not guarantee any investment at the time because it was still working on a restructuring with Fiat SpA of Italy to save the company.
Chrysler received $3.8 billion in loans from the federal and Ontario governments in May.
One source said although a new paint shop is inevitable, it may take longer to build because of other financial priorities in the company\'s fight for survival.
The Brampton plant, which opened in 1987, still uses its original paint shop, which is no longer up to top industry standards and is not efficient when the plant is producing high volumes on three shifts.
The plant is now operating on three shifts, but industry insiders say Fiat and chief executive Sergio Marchionne think highly of Canadian operations in Windsor and Brampton and their future prospects.
In 2005, previous owners DaimlerChrysler invested $575 million for a new paint shop and other upgrades at the Windsor complex, the world\'s biggest minivan operation.
One source suggested production on the shop would likely begin next spring, finishing in time for the launch of two new vehicles in 2011.
There is speculation Chrysler will build the 200C hybrid and the high-end, low-volume Alfa Romeo 169 sports sedan in Brampton.
Critics have raved about the 200C concept car and its potential as a high-volume vehicle.
The flexible plant now builds the Chrysler 300 sedan and the Dodge Charger and Challenger sports cars. Falling demand forced the company to cut one of three shifts and about 1,000 jobs last year.
At a meeting in late June after the restructuring, managers showed to workers in Brampton models that are being considered for the plant.
\"Management pulled down a screen and it showed the 200C and Alfa Romeo models,\" a worker said.
Earlier that month, research firm IHS Global Insight Inc. said Chrysler would start building the Alfa model at the Brampton plant in November 2011.
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