Canada: government subsidies for Chrysler, but not only image

Last month, Fiat SpA chief executive Sergio Marchionne disclosed that Fiat Chrysler Automobiles might decide to stop plant assembly upgrade at their Canadian facility if the government refuses financial help.

Now, Finance Minister Jim Flaherty has announced a $500-million (Canadian dollars) subsidy plan to keep up Canada’s auto sector, and the federal officials might offer the cash to Chrysler Group, but would also be destined to other automakers.

“The money that’s been set aside in the Auto Innovation Fund is not just for Chrysler, it’s for some of the other automotive companies in Canada,” Flaherty told reporters. “I’m not saying that there should be some automatic subsidy of automobile plants. I am saying that we need to give it a long, hard look and make sure that we are careful in what we do before we let one of the large auto manufacturers leave Ontario.”

This Tuesday, the Canadian government increased sharply the money available in the Automotive Innovation Fund, which were also included in the annual budget, aiming to stop the decline of its share of North American auto manufacturing.