Honda to invest $857M in Ontario plant to build next generation of Civic passenger car

ALLISTON, Ont. – Honda is investing $857 million in its car plant in Alliston, Ont., over the next three years, with provincial taxpayers kicking in 10 per cent of the total cost.

Premier Kathleen Wynne announced Thursday that the province will give Honda a conditional grant of up to $85.7 million for “leading edge technologies” to upgrade vehicle assembly and engine manufacturing. Government officials said the grant money is to be doled out over five years.

“This investment by Honda is a vote of confidence in Ontario’s highly skilled workers,” Wynne said. “It’s a vote of confidence in Ontario’s capacity for innovation and leadership and it’s a vote of confidence in Ontario’s auto sector, which remains one of the strongest and most diverse in the world.”

The investment supports thousands of jobs not only in Alliston, but across the auto supply chain, Wynne said.

Honda said the new funding will make the operation a teaching plant for all other Honda facilities.

Alliston, about 90 kilometres north of Toronto, is becoming the first Honda plant in the world to launch the next generation Civic into mass production and will develop the processes and tooling trials that will form the manufacturing base at all Honda plants worldwide, the company said.

“We are deeply proud to be the lead plant for the next generation of Honda Civic, a designation that reflects the incredible efforts of Honda associates over the past quarter century to produce products of the highest quality for our customers in Canada and around the world,” said Jerry Chenkin, president and CEO of Honda Canada.

“This marks the first time a Honda plant outside Japan has been designated as a global lead plant.”

The money will also fund new research and development partnerships with Ontario universities and colleges, the government said.

NDP Leader Andrea Horwath wants to make sure there are firm job guarantees attached to the provincial money.

“We think it’s worthwhile to keep auto sector jobs in Ontario, but what we do want to make sure is that there’s value for the investment that taxpayers provide or that the government commits to with these grants,” she said.

“So with $85 million, what is the guarantee around keeping investment here and making sure that we continue to have the same workforce, that the 4,000 have their jobs guaranteed?”

Interim PC Leader Jim Wilson is pleased Honda will be expanding its Alliston plant in his riding, but said the government should not give big grants to a select few companies.

“I’m happy to see the jobs, but my preference would be for the government to get off this slippery slope of picking winners and losers and do the right thing for the economy, and for jobs, and lower (electricity) rates and taxes for all the businesses and let them — without government grants — create the jobs.”

“There’s probably times when government has to make strategic investments, but I think this is a case where Honda would have went ahead anyway, and there are other ways that would be fairer to all companies to address the jobs that we’re losing in the manufacturing sector and instead create jobs.”

Ontario recently lost out on a new engine plant from the Ford Motor Co., after it was unable to reach a deal with the federal and Ontario governments to bring the investment to Windsor, Ont. Unifor said Ford will instead build its new engine in Mexico.

Both levels of government suggested last month that they would not provide public money for the project because the automaker wouldn’t make certain job and economic commitments.

The federal government said Ford had approached Ottawa and Ontario with an “unprecedented funding request” but that the terms in its proposal “were not in the best interests of Canadian taxpayers.”

Ford would not confirm whether it would be building its new engine in Mexico, saying for “competitive reasons” it does not discuss future product plans.

In October, Ford said it would add 1,000 jobs at its plant in Oakville, Ont., by the end of this year to build the 2015 Ford Edge crossover SUV.

Note to readers: This is a corrected story. An earlier version said Ford Motor Co. announced it would build a new engine plant in Mexico.