[CAMBRIDGE, ON] - Two Toyota plants in Ontario will receive a $545 million injection from the automaker and the federal and provincial governments to give the aging facilities an environmentally-friendly makeover.
Ontario will provide a $70.8 million grant and the federal government will match that amount in the form of a repayable loan to Toyota Motor Manufacturing Canada Inc. for plant upgrades in Cambridge and Woodstock.
“(This money) is very important because it allows us to give these initiatives priority and helps to secure our production footprint in Canada,” said Ray Tanguay, chairman of Toyota Motor Manufacturing Canada.
The round of upgrades will support production of cleaner, more fuel efficient vehicles at Toyota's Ontario plants. The automaker will use part of the money to upgrade the paint shop at its Cambridge North plant. The company plans to convert its base-coat paints from a solvent-based system to a water-based system to reduce emissions.
It will also make other plant upgrades, including new machinery and equipment, employee training, and projects to increase efficiency and reduce waste.
The federal government said those upgrades will create jobs, thought it did not specify how many.
The announcement was made at the company's plant in Cambridge by Gary Goodyear, federal minister of state for science and technology.
“The development and implementation of innovative, fuel-efficient technologies are key to a competitive, forward-looking automotive industry in Canada,” Goodyear said in a statement.
“The presence of Toyota Motor Manufacturing Canada has been a tremendous boost to not only the local economies of Cambridge and Woodstock but also to Ontario and Canada.”
He was joined by John Milloy, Ontario's minister of training, colleges and universities. The province says the plan dubbed “Project Green Light” will help secure 6,500 jobs at the two plants.
“I was really heartened to hear Ray Tanguay say his priority is creating jobs,” Milloy said in an interview after the announcement.
“The auto sector is such a huge part of our economy ... we've got to make sure we keep our winners like Toyota.”
The investment comes as the auto industry undergoes a turnaround from the depths of the recession when two of the world's largest automakers - General Motors and Chrysler - were forced to turn to the U.S., Canadian and Ontario governments for bailout money.
The auto industry recovery has helped to support some 400,000 jobs across Ontario, but the Canadian sector still faces headwinds such as the impact of the rising loonie on export-oriented businesses like auto manufacturing.
The heads of some large U.S. automakers have hinted that it could be difficult to keep jobs and production in Canada without government assistance as the loonie inflates labour costs.
Ken Lewenza, national president of the Canadian Auto Workers union said Toyota's commitment to upgrades in Ontario is an example of why government support is important to the auto industry.
“It's a great day for the automotive industry in Ontario,” he said.
However, Lewenza was skeptical that the investment would create new jobs because upgrades to equipment and infrastructure produce efficiencies, requiring less labour. He said the investment should be enough to ensure that all of the current employees keep their jobs.
Milloy could not say whether the Ontario government was planning future initiatives to support jobs in the industry, but said ministers “continue to work very, very, closely” with the sector.
“We've had some great successes, looking back, and some pretty tough times,” he said.
“We're seeing growth in that sector, we're seeing jobs being retained and jobs being created.”
The plant in Cambridge assembles the Toyota Corolla and the Lexus RX350 crossover utility vehicle, while the nearby plant in Woodstock assembles the RAV4 crossover.
In 2009 Toyota announced it would hire 800 more people in Woodstock, bringing the company's total Canadian employees to 6,500. The Cambridge plant had 600 when it started up 25 years ago.
Toyota's Cambridge South plant recently earned the 2011 J.D. Power and Associates Platinum Plant Quality Award, deeming it the highest ranked global automotive manufacturing facility.
The announcement comes as Toyota struggles to get its plants - including the two in Ontario - back to full production following supply chain disruptions caused by Japan's earthquake and tsunami in March.
Toyota Canada's June sales fell nearly 28 per cent, largely due to the fallout from Japan's disaster, which crippled auto production and has resulted in shortages of some models.