Minister Jim Prentice Announces Investment in Auto Sector Jobs -- Partnership with Ford Expected to Create or Sustain up to 757 Canadian Jobs and Make Canada a Leader in Green, Fuel-Efficient Auto Technologies

WINDSOR, Ontario, September 3, 2008 — A new joint investment with the Ford Motor Company of Canada will create or sustain up to 548 auto sector jobs, with a potential for increasing employment up to 757 auto sector jobs, and make Canada a major research centre for greener, fuel-efficient engine technologies, the Honourable Jim Prentice, Minister of Industry, announced today.

"This is more than just a partnership between industry and government. This is also a partnership with the professional, highly skilled workers in our auto sector," said Minister Prentice. "Through this partnership, we are doing our part to create better jobs for both today and tomorrow, while ensuring that Canada remains an auto sector leader on the world stage."

Under the new agreement, the federal government will invest in Ford's Renaissance Project. The Renaissance Project will include the establishment of a new flexible engine assembly plant in Windsor, as well as the creation of a new North America Centre for Diesel and Advanced Powertrain Research and Innovation, which will perform research into engine efficiency and new fuel technologies.

"At its core, this investment is about jobs for the future," explained Minister Prentice. "The new auto plant is being designed to new flexible specifications that will allow it to easily adapt to, and take advantage of, new products and new markets. In addition, the new research centre will ensure that more of the future breakthroughs in environmentally friendly auto sector technologies will originate right here in Canada."

The total investment among all of the partners in the Renaissance Project could reach $730 million. The federal government has agreed to provide a repayable contribution of up to $80 million through its Automotive Innovation Fund (AIF), conditional upon successful completion of all federal requirements under the terms and conditions of the AIF. The terms of the agreement also provides Ford with the option of further expanding production and employment at the new Windsor plant.

For further information (media only), please contact:

Bill Rodgers
Director of Communications
Office of the Honourable Jim Prentice
Minister of Industry
613-995-9001

Media Relations
Industry Canada
613-943-2502

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Backgrounder
Automotive Innovation Fund Investment in the Ford Motor Company of Canada's Renaissance Project

On September 3, 2008, the Honourable Jim Prentice, Minister of Industry, announced that the Government of Canada would invest up to $80 million in the Ford Motor Company of Canada's Renaissance Project, an initiative that will total up to $730 million by the 2012 calendar year. The project will create or sustain up to 548 auto sector jobs, with a potential for increasing employment up to 757 auto sector jobs over the next four years.

About the Investment

There are two main components of the Ford Motor Company of Canada's Renaissance Project:

1. The establishment of a state-of-the-art flexible engine assembly plant in Windsor, Ontario; and
2. The creation of Ford's North America Centre for Diesel and Advanced Powertrain Research and Innovation.

The federal contribution to the Renaissance Project is conditional upon successful completion of due diligence, including third-party verification, and all other federal requirements under the terms and conditions of the Automotive Innovation Fund.

About the Flexible Engine Assembly Plant

The new Flexible Engine Assembly Plant will be located on the site of the currently idled Essex Engine Plant.

The plant's design and technology will focus on flexibility and, as a result, not only will the plant focus as a core facility for Ford in North America, it will also be able to quickly adapt to the production of other types and sizes of engine, depending on market conditions.

This new flexible design will help ensure the long-term sustainability of the plant, even as market conditions change. In addition, this flexibility will help keep this plant at the forefront of green auto technologies by ensuring that new advanced technologies can be incorporated quickly into the engines produced at the plant.

Production is expected to be up to 215 000 engines per year, and employment reaching 501 people. The initial investment in the plant will be $473 million, of which the Government of Canada will contribute $42.3 million. Should market conditions be favourable, Ford may choose to invest a further $140 million to expand production by 110 000 engines per year. Should this happen, the Government of Canada will contribute an additional $14.5 million to the project.

About the North America Centre for Diesel and Advanced Powertrain Research and Innovation

The new North America Centre for Diesel and Advanced Powertrain Research and Innovation will replace and expand the Ford Motor Company of Canada's current Powertrain Engineering Research and Development Centre, which is slated to close in 2009 due to equipment obsolescence.

The research centre will have 16 advanced powertrain dynamometer test cells that will be used for engine testing in support of daily production, as well as ongoing advanced powertrain research and innovation, including collaborative work with universities and parts suppliers.

The research centre will be equipped to perform advanced research and development on prototype powertrains, gasoline powertrain technologies, hybrid technologies and alternative fuel powertrains including diesel, biodiesel, ethanol blends and hydrogen.

At the new and expanded facility, Ford will consolidate a significant part of its engine testing capacity for North America. It is expected to create or sustain up to 47 knowledge-based jobs in Windsor. Total investment in the creation of the research centre is expected to be $117 million. The Government of Canada's contribution to the research centre will be $23.2 million.

About the Automotive Innovation Fund

The Automotive Innovation Fund (AIF) was introduced in Budget 2008 and provides
$250 million over five years to automotive firms in support of strategic, large-scale research and development projects to build innovative, greener and more fuel-efficient vehicles.

Industry Canada will consider proposals for funding under the AIF that include private sector investment in Canada valued at a minimum of $300 million over five years. Eligible projects include vehicle and powertrain assembly operations that are associated with significant automotive innovation and research and development initiatives.

Individual proposals are evaluated based on the strength of the business case, with specific emphasis on innovation, research and development, environmental, and economic benefits.

Funding through the AIF is provided in the form of unconditionally repayable contributions. At the end of the payback period, funding recipients will have paid back the contribution in full. Each proposal for AIF support is subjected to a comprehensive due diligence process to assess the project's feasibility and risk, as well as its ability to deliver the proposed innovation, environmental and economic benefits.