The Toronto Star is reporting that Ford Motor Co. will soon announce a ~$700US million investment in it’s Oakville, Ontario plant, where it assembles the Ford Edge and Lincoln MKX midsize crossovers. According to Toronto’s Globe and Mail newspaper, $135 million of that will come from the Ontario and Canadian governments, which recently divested some of their bailout related shares in General Motors. The investment by Ford follows commitments made to the Canadian Auto Workers, now under the banner of Unifor, to add 600 jobs to the Oakville facility.
The next generation Flex and MKX will share the CD4 platform with the Fusion and MKZ sedans. The investment means that Oakville will have the capability to build cars based on CD4 which raises the possibility that the plant may join Hermosillo, Mexico and Flat Rock Michigan in building FoMoCo’s midsize sedans. Ford recently added Fusion production at Flat Rock to increase supply of the car, which has been in short supply.
Automobile operations in Canada are jeopardized by the country’s current status as the world’s most expensive place to build cars. In addition to the Oakville plant, Ford operates two engine plants in Windsor, across the Detroit River from Dearborn.
To keep costs down, after the CAW ratified the current 4 year contract Ford offered 1,000 hourly workers incentives to retire. New hires to replace those retirees will start at a lower hourly pay rate and not reach the current full rate for 10 years.
Meanwhile, the Volkswagen Group plans to spend 1.2 billion reais ($529US million) in Brazil to restart local assembly of Audis and begin local production of the VW Golf, according to a spokesman for the Brazilian state of Parana.
Fifty million reais will go to expand VW’s factory at Sao Jose dos Pinhais in order to start assembly of Audi’s A3 compact sedan and Q5 compact SUV in 2015. A3 capacity is planned to be 26,000 units annually by 2018. The same factory will receive a 700 million real investment to prepare it to start building the latest Golf model.
Brazil’s federal government recently raised taxes on imported vehicles while offering tax incentives to automobile manufacturers that increased local investments. BMW had earlier announced a $267 million investment in a factory in the southern state of Santa Catarian, with a capacity of 30,000 units, starting production there in late 2014. Luxury sales in Brazil have increased due to rising wages for highly skilled professionals, persuading Audi to once again build cars locally. Audi had previously assembled A3s at the Parana plant from 1999 to 2006.