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Windsor gets bailout dividend: new Chrysler minivan

Auto maker will begin production of right-hand-drive minivans at Southern Ontario plant next month
Chrysler Group LLC will crank out a new version of its minivan in Windsor, Ont., beginning next month, industry sources and union officials said yesterday, giving the Canadian auto industry its second shot in the arm in two days.

The Windsor minivan plant will begin production of right-hand-drive diesel versions of one of the auto maker's most successful products, said Rick LaPorte, president of Local 444 of the Canadian Auto Workers.

“We've been told that the goal is to sell 30,000 units annually,” Mr. LaPorte said from Quebec City, where he is attending the union's annual convention.

“Fiat has also indicated that they're going to put a big marketing push on to sell minivans in Europe,” he said.

The move to produce the minivan is the first dividend resulting from the bailout of Chrysler by the federal and Ontario governments – along with the U.S. government – which paved the way for the sale of the bankrupt company earlier this year to Italian auto maker Fiat SpA.

It follows a decision by General Motors Co. that was announced on Tuesday to restore a third shift at its Cami Automotive Inc. joint venture in Ingersoll, Ont.

Mr. LaPorte said the necessary tooling and equipment to build the vehicles was installed at the plant around the end of last year, before Chrysler went into Chapter 11 bankruptcy protection but while it was already negotiating with the governments for a financial rescue package.

Ontario and Ottawa provided $3.8-billion as part of a debtor-in-possession financing package for Chrysler, which went into Chapter 11 protection on April 30 and emerged about a month later.

The Windsor plant produced as many as 350,000 minivans annually on three shifts, plus overtime, at the height of the minivan boom during the 1990s and earlier this decade.

Although sales of minivans as a segment have slowed down – due to factors such as changing demographics and the rise of crossover utility vehicles – it is still a critical vehicle in the Chrysler lineup.

Chrysler sold 100,726 Caravan and Town and Country models this year in the U.S. market – the destination for about 80 per cent of the vehicles built in Windsor – as of the end of July. Although that's down about 50 per cent from 2007 levels, the minivan is the company's second-highest-selling vehicle, after the Ram pickup truck.

Right-hand-drive minivans were previously assembled for Chrysler by Magna International Inc. at the Canadian auto parts giant's Magna Steyr assembly operation in Graz, Austria, and at a Chrysler factory in St. Louis, Mo., that was recently shuttered.

Sources said Chrysler had built up enough inventory of the right-hand-drive minivans from the St. Louis plant, prior to its closing this year, that it didn't need to build the vehicles for the past several months.

Right-hand-drive markets include Britain, Japan and India.

Chrysler announced earlier this year that it was reducing production at the Windsor plant to two shifts from three, which would have eliminated about 1,200 of approximately 4,500 jobs.

But it reversed that decision after emerging from bankruptcy protection.

LINK:Windsor gets bailout dividend: new Chrysler minivan - The Globe and Mail
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