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Ottawa, Ontario invest $100M at Guelph-based auto parts maker Linamar

A Linamar Corp. facility in Guelph, Ont., on May 8, 2014. THE CANADIAN PRESS/Stephen C. Host

The federal and provincial governments are investing around $100 million to global auto parts maker Linamar Corp.’s $506.8-million research and development project.

Transport Minister Lisa Raitt and Premier Kathleen Wynne made the announcement at a news conference on Monday morning at the Guelph-based company.

They were joined by Wellington-Halton Hills MP Michael Chong; Minister of Economic Development, Employment and Infrastructure Brad Duguid; and Linda Hazenfradts, CEO of Linamar.

Raitt said the federal government will provide $50.7 million, as a repayable loan, to develop the “latest environmentally-friendly next generation of auto transmission parts.”

The investment will “ensure that Linamar’s total investment of over half-a-billion dollars stays right here in Canada,” Raitt said.

The project is expected to create 1,200 new jobs in Guelph and the surrounding area over the next 10 years, and maintain over 6,800 Linamar jobs in Ontario.

Linamar, which is Canada’s second-largest auto parts maker, employs more 19,000 employees globally with the headquarters and factories in Guelph, along with plants in the U.S., Mexico, Europe and China.

The company, which has made transmission parts for almost 50 years, started with one person and now employs 7,000 people in Ontario. It contributed $3.6 billion to the Canadian economy in 2014.

“Linamar is a Canadian success story and it is without question one of the anchors in the auto supply chain,” Raitt said.

“Canada is a great place to build cars, and our government is serious about supporting this industry.”

The loan from Ottawa to Linamar’s project is being matched by a grant of up to $50.25-million from the Ontario government.

“This is a place that really can show all of us how many manufacturing and how training can work for the province and the country,” Ontario Premier Kathleen Wynne said at the news conference.

She also spoke about Ontario’s innovative training and Linamar shows young people what manufacturing is.

“Our advantage in Ontario is our skilled workforce,” Wynne said.

Wynne said the province has been partnering with Linamar since 2007, and that “the provincial and federal governments both have a role to play in partnering and making sure that that growth can continue.”

Over the next 10 years, Linamar will invest in research and development in Guelph and produce components for the next generation of fuel efficient cars, Wynne said.

Wynne said the investment is part of the 10-year jobs and prosperity fund [PDF] the Liberals promised during the most recent election campaign.

The jobs announcement is a lift for the auto parts sector, which is looking to capitalize on record North American auto sales in 2014.

With files from Sarah-Joyce Battersby, Patricia D’Cunha and Mike Eppel