Chrysler Group LLC announced on Tuesday it will continue the development of two assembly plants in Ontario after withdrawing its request for government aid.
Chrysler currently builds minivans at its plant in Windsor, and big vehicles in its Brampton plant, according to Associated Press.
The announcement surprised politicians and union leaders, who were concerned about the long-term future of the plants, The Star reported.
Sean McAlinden, research director at the Center for Automotive Research in Ann Arbor, Mich. stated his surprise with Chrysler's decision.
"This is unprecedented," McAlinden said. "In the two most traditional automotive regions in North America- Michigan and Ontario- governments have been subsidizing the auto industry for over 100 years."
While Chrysler is giving Canadian unions and government the responsibility of helping reduce costs, the automaker is withdrawing requests for $700 million in subsidies from the provincial and federal government, according to USA Today. The Brampton plant will continue to produce updated models of the Chrysler 300, Challenger and Dodge Charger, which will go on sale later this year.
"It is clear to us that our projects are now being used as a political football, a process that . . . ultimately will not be to the benefit of Chrysler," Chrysler said in a statement.
According to USA Today, Chrysler CEO Sergio Marchionne, who went to school in Windsor and has family in Toronto, stated his confidence in the company's decision.
"Our commitment to Canada stays strong," Marchionne said. "It is my sincere hope that all stakeholders involved commit to do what they can to preserve the competitiveness of the country, and in particular of the province of Ontario. We will do what we can to preserve and nurture the competitiveness of our operations, but we reserve the right to reassess our position as conditions change."
Marchionne also stated that Chrysler will have negotiations in 2016 with its labor union Unifor, USA Today reported. Marchionne said the negotiations will be "of particular importance for this evaluation."
