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Ford calls on Ottawa after Ontario makes $17-million investment in engine plant

WINDSOR, Ont. — Ford of Canada will use a $17-million investment from the Ontario government as part of a $168-million plan to reopen the Essex engine plant in southwestern Ontario, but the company warned Monday it will not expand the project further without direct participation from the federal government.

"This is the first phase of the project," Ford Motor Co. Group Vice-President Joe Hinrichs said as he announced the plans to build new V8 engines in Windsor.

"We are not able - or willing - to move forward with the second phase of the project until we can find resolution to all the issues we have outstanding with the governments."

Ford originally planned a $300-million investment at the Essex plant, which threw 900 people out of work when it shut last November, but scaled back when the federal Conservatives balked at the automakers' request for $30 million apiece from Ottawa and Ontario.

The plant became a political football as federal Finance Minister Jim Flaherty insisted tax cuts - not direct government investments - are the best way to encourage investment and create new jobs. Premier Dalton McGuinty countered that governments must do their part to secure large projects by multinationals like Ford.

"We think the auto sector is key to growing our economy," McGuinty said Monday.

The province's participation and the Canadian Auto Workers agreement to let Ford "do things differently" at the Essex plant, including contracting out some services such as janitorial, convinced Ford to reopen the Windsor facility, said Hinrichs.

"This project wasn't on our radar screen even 18 months ago, and when we idled the Essex engine plant in November we didn't anticipate that this was going to be our plan," he said.

"We've been in good, constructive conversations at both the federal and provincial level about what it means to possibly enlarge the investment here and make it an even bigger project. That's still left undone."

McGuinty joined Hinrichs and CAW president Buzz Hargrove for Monday's announcement at the sprawling engine plant and said he too was hopeful about federal participation in the Ford project.

"I remain very optimistic about the federal government and their commitment for the auto sector," said McGuinty.

"I look forward to another opportunity in the not too distant future for us to be here together with our colleagues in the federal government."

CAW local 200 president Mike Vince said he had "dreamt of this day, many, many times," while Hargrove said the announcement that even 300 jobs would be returning to Windsor felt like he had "won a lottery."

But Hargrove went on to say the Ford project in Windsor would have been much bigger - with even more jobs - if Prime Minister Stephen Harper's minority Conservative government would have agreed to participate.

He accused the Tories of writing off the troubled auto sector.

"We've got Mr. Flaherty and Mr. Harper saying 'we're not doing anything, we don't do those things,' and it's just so frustrating, it angers me," said Hargrove.

"You have to deal with the cards you have. Hopefully there'll be an election and that will change."

McGuinty called the announcement "great news for Windsor families," but Ford would not say exactly when the Essex plant will reopen to build new energy-efficient V8 engines, or where those engines will end up being used.

"We're not providing details of the engine program for competitive reasons today, and we also look forward to the opportunity to possibly expand this conversation," said Hinrichs.