Honda expansion a win for Ontario’s auto sector

With a conditional grant of up to $85.7 million from the government of Ontario, Honda Canada is set to invest $857 million in its Alliston plant to make it the lead production facility worldwide for the next generation Honda Civic. The Alliston plant will be the first to launch the new Civic, and it will develop the processes and tooling that will be followed by other Honda plants around the world. It is the first time that a Honda plant outside Japan has been designated a global lead plant, the president of Honda Canada said.

The government’s 10 per cent portion of the investment, to be given over five years, will be used for “leading edge technologies” for vehicle assembly and engine manufacturing. It will also fund research and development in universities and colleges. It does not mean any additional jobs, however. There are currently about 4,000 workers in Honda’s three Alliston plants. As well, the approximately 1,500 suppliers who provide parts and services to the auto sector will benefit from the continued production. That business is reportedly worth about $2.1 billion annually.

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Premier Kathleen Wynne announcing the investment of $857 million to be made at Honda Canada’s Alliston plant.

Premier Kathleen Wynne called the Honda decision a “vote of confidence” in Ontario’s “highly skilled” workers and their capacity for innovation and leadership, and a vote of confidence in the auto sector in the province, which she called “one of the strongest and most diverse in the world.” Both the economic development minister, Brad Duguid, and Honda president Jerry Chenkin acknowledged that winning major investments like this is a struggle. The recent loss of a Ford engine plant to Mexico illustrates how difficult it can be. In that case, according to reports, government investment was not forthcoming to Ford because the company  did not provide sufficient job guarantees to satisfy the government.

Honda’s Ontario plants now produce 390,000 Civics and CR-Vs annually, of which approximately 100,000 are sold in Canada.

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