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article imageFiat Chrysler CEO steers clear of political interference in Canada

    Mar 5, 2014 in Business

GENEVA (Reuters) - Chrysler Group LLC withdrew its request for funding from the Canadian government to avoid becoming entangled in what had become a political hot potato, the chief executive of parent Fiat Chrysler Automobiles (FCA)<FIA.MI> said on Wednesday.

Chrysler announced on Tuesday that it would push ahead with development plans for two key assembly plants in the Canadian province of Ontario but would keep its "strategic options" open after withdrawing requests for government funding.

"I'm not here to try to satisfy people's egos or political ambitions," Sergio Marchionne told journalists on the sidelines of the Geneva auto show. "I've got a business to run, so we've moved on. I have to make cars."

Pressure began building around the issue in January, after Marchionne said that Canada needed to step up financial incentives to secure Chrysler's investment plans. In 2009 the Canadian government contributed about $2.9 billion towards Chrysler's bailout.

Marchionne declined to comment on whether Tuesday's decision would affect the size of his investment or on the figures involved, though Chrysler was reported to have sought $700 million towards a $3.6 billion total investment.

"How much money we commit is not up for public scrutiny and I don't want politicians screwing around with our capital expenditure," said Marchionne, who has dual Canadian and Italian citizenship.

He said Tuesday's decision gave the company more freedom to make decisions based on profitability.

Chrysler said it would go ahead with plans to develop and produce its next-generation minivan at its Windsor plant in Ontario. The plant employs more than 4,600 workers.

It will also produce revamped models of its Chrysler 300, Dodge Challenger and Dodge Charger at Brampton, Ontario, where it employs nearly 3,250 workers.

Marchionne, however, added that the company would continue to monitor the developments in Canada.

"We've got to make sure that we are sitting in a competitive environment," he said.

(Reporting by Agnieszka Flak; Editing by David Goodman)

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