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From: http://www.theglobeandmail.com/servlet/story/LAC.20060518.RHONDA18/TPStory/TPBusiness/Ontario/
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POSTED ON 18/05/06
AUTOMOTIVE
Ontario gets set to court Nissan
After snagging Honda engine plant, another maker eyed

GREG KEENAN AND KAREN HOWLETT
TORONTO -- Now that Ontario has landed a Honda engine plant and a Toyota assembly plant, Economic Development Minister Joe Cordiano is setting his sights on the third of Japan's Big Three auto makers -- Nissan Motor Co. Ltd.

Mr. Cordiano and Ontario Premier Dalton McGuinty will travel to Japan, probably at the end of June, and want to knock on the door at Nissan, which has signalled that it would consider an assembly plant in Canada when its share of the market here reaches 10 per cent.

Nissan could hit that target by 2010, Mr. Cordiano said yesterday.

"It sounds good to me," he said. "We'll work towards that date."

His comments came as Honda Canada Inc. officials confirmed an investment of $154-million in an engine plant in Alliston, Ont., that will create 340 jobs.

It will be Honda's first engine plant in Canada, and will supply the neighbouring Honda vehicle assembly plant, which cranks out about 390,000 vehicles a year, including the compact Civic, which has been the best-selling passenger car in the country for eight successive years. The Honda news came just days after Linamar Corp. of Guelph, Ont., announced a $1.1-billion, five-year plan to create 3,000 jobs in Ontario.

Last June, Toyota Motor Corp. said it would build a new assembly plant in Woodstock, Ont., that will create 2,000 jobs.

"I wish we could enjoy as much success in other sectors as we do in autos," Mr. McGuinty told reporters yesterday. "In 2½ years, we have landed more than $7-billion worth of new investments, thousands of new jobs, and secured thousands of existing jobs."

As its contribution to the Honda project, the province will improve infrastructure in the Alliston area, spending an amount up to 10 per cent of the auto maker's $154-million investment. No decision has been made on precisely how much the province will need to spend to upgrade roads and perhaps utilities, Mr. Cordiano said.

Honda employs about 5,100 people in Canada, including 4,300 people in Alliston, who put together the Civic and Acura CSX cars and the Ridgeline, Pilot and Acura MD-X sport utility vehicles. Production began in 1986.

The auto maker has not sought any money from the federal government for its new plant, Honda Canada senior vice-president Jim Miller told a news conference in Toronto. "Our philosophy is that when we have demand we will produce a car or an engine," Honda Canada president Hiroshi Kobayashi said.

The Ontario infrastructure money will not come from the $500-million Ontario Automotive Investment Strategy, which has committed about $460-million to Linamar, DaimlerChrysler Canada Inc., Ford Motor Co. of Canada Ltd. and General Motors of Canada Ltd.

Mr. Cordiano said he would like to see a stronger effort by Ottawa to help attract new manufacturing companies to Ontario.

As part of the province's growing focus on the auto industry and auto parts, it is increasing the size of its office in Japan, and Mr. McGuinty and Mr. Cordiano will also target Japanese auto parts makers on their trip.

"We have that critical mass now [so] we can make the pitch that more should be coming," Mr. Cordiano said of the parts makers.

He added that he will also target German-based auto makers.

Such a move makes more sense than targeting Nissan, one industry source said yesterday.

Nissan has adopted a southern U.S. strategy, with a recently constructed assembly plant in Mississippi and the move of its U.S. headquarters from California to Tennessee, where it also has assembly operations.

"What does make sense is going after Audi right now," said the source, who noted that the German-based auto luxury auto maker is being battered by the rising value of the euro. "They need to add capacity in North America to cut their costs."
 
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