Chuck Howitt, Record staff – Wed Jan 23 2013 
CAMBRIDGE — Toyota’s plans to boost production of Lexus vehicles in Cambridge received a $33.8 million shot in the arm Wednesday from the federal and provincial governments.
Ottawa and Ontario are each kicking in $16.9 million to help the automaker build a new blended assembly line to produce 26,000 more Lexus RX350 sport utility vehicles at the plant, including 15,000 hybrid versions of the car.
The hybrid cars, known as the Lexus RX450h, will be the first hybrid vehicles manufactured in Canada when they roll off the line early next year.
Prime Minister Stephen Harper and Ontario Premier Dalton McGuinty met some of the workers who will be building the new Lexus vehicles during a tour of the Cambridge plant on Wednesday.
Afterwards they announced the funding in a Toyota auditorium where a shiny, new charcoal-grey Lexus was on prominent display.
The federal money is contingent on the automaker making a significant investment of its own.
Toyota has already done this, announcing last July an investment of $100 million to increase Lexus production to about 100,000 vehicles a year at the plant beginning in 2014.
The investment would also create 400 new jobs at the Fountain Street facility.
Harper praised Toyota for not only providing “high-quality, well-paying” jobs in the region, but keeping everyone employed during the economic recession of 2009-09 and the Japanese tsunami of 2011.
“Now that is quite a commitment Toyota has made to this community,” he said to loud applause from the gathering of about 120 Toyota officials, employees, politicians and business leaders.
Offered as an interest-free loan, the federal funding will enable the company to retool its assembly line “to smoothly and rapidly” switch between production of the Lexus RX350 and the hybrid gas-electric vehicle, the prime minister said.
“This really is terrific news for the Canadian auto industry,” he added.
The federal money is coming from the Automotive Innovation Fund, a $250-million five year initiative launched in 2008 to help pull the auto industry out of the recession.
The government announced a five-year extension of the program earlier this month. Toyota qualified for $70 million under the first phase of the program in 2011.
The provincial funds, offered as a grant, come from Ontario’s Strategic Jobs and Investment Fund.
“Today’s announcement is another vote of confidence not only in Toyota’s very skilled workers but in our $13 billion auto sector,” McGuinty said.
The provincial investment in the hybrid vehicle is consistent with Ontario’s long-term plan to close coal plants and stimulate the growth of clean and renewable energy, he noted.
“The Lexus hybrid that you’ll be building here fits us to a T,” he told the gathering, which included Ray Tanguay, chair of Toyota Motor Manufacturing Canada, and Brian Krinock, president of Toyota manufacturing in Canada.
Tanguay thanked the governments for building a strong partnership with the auto sector and Toyota. He noted that the Cambridge facility is the only Toyota plant outside Japan that builds the Lexus vehicle.
With the added volumes, “Today we’re going to make it even bigger,” he said.
“We believe that hybrid technology is the direction of the future. This gets us in the game.”
The province also kicked in a $70-million grant to Toyota when it qualified for funding in the first phase of the federal Automotive Innovation Fund in 2011.
Toyota used the money to top up an investment of $400 million of its own in a program called Project Green Light.
Its purpose was to implement energy-saving measures and produce more fuel-efficient vehicles in Cambridge and Woodstock.
Toyota also makes the Corolla and Matrix in Cambridge. It produces the RAV4 crossover vehicle in Woodstock. The two plants employ almost 7,000 people.
Since launching the Automotive Innovation Fund, the federal government has also doled out $54.8 million to Linamar in Guelph, $80 million to Ford Motor Company of Canada and $21.7 million to Magna International.
Wednesday’s news conference was a bittersweet affair for McGuinty. It was his last as premier. On the weekend, the governing Liberals will choose a new leader.
Harper paid tribute to his departing colleague at the outset of his remarks.
“Today’s announcement is emblematic of the co-operation and shared objectives that have characterized the work of our two governments over the past few years,” the prime minister said.
“You are concluding an extraordinarily long period of public service to the people of Ontario,” Harper added.
For his part, McGuinty thanked the prime minister for the “common ground we have found in the past.”
In a later news conference, he said the top priority of his successor should be to eliminate the provincial deficit.
chowitt@therecord.com
http://www.therecord.com/news/business/article/874067–toyota-gets-33-8-million-for-lexus-hybrid-production