(Adds comments from Canadian industry minister)
By Scott Anderson
TORONTO, Jan 30 (Reuters) - DaimlerChrysler will look outside Ontario to build a state-of-the-art auto plant if it can't be sure a Canadian plant will pay, the head of the firm's Chrysler division said on Thursday.
Dieter Zetsche, president and chief executive of the Chrysler Group, declined to confirm Canadian newspaper reports that he was seeking C$300 million ($200 million) in federal and provincial funds before he would commit to the project.
But government support would be "an important element" in the company's decision, he added.
"We are making progress and, at the end of the day, the project has to be economically viable. Then we can decide in favor or if we aren't," Zetsche told reporters in Toronto.
DaimlerChrysler, North America's No. 3 automaker said last fall it might construct an assembly plant in Windsor, Ontario, across the river from Detroit, but only if it gets backing from the government, its union and its suppliers.
The promise was a key element in allowing the company to wrap up contract negotiations with the Canadian Auto Workers union with a three-year deal that raised pay and guaranteed union jobs.
Zetsche, on his first visit to Toronto as the group's top executive, was also meeting with Ontario Premier Ernie Eves. The Windsor project would be "a topic for discussion," he said.
This follows similar meetings with Canadian Auto Workers union head Buzz Hargrove who huddled with Eves earlier this month to plead the union's case.
"This isn't corporate welfare. It is about how we ensure that we get our fair share of the major new investments that are taking place in one of the most critical industries anywhere in the world," Hargrove said on Tuesday, urging Ontario to pony up money to attract new business to the province's auto sector.
Zetsche refused to say what he wanted from Eves, but said an Ontario support package could come in the form of money, help in training and infrastructure improvements.
"We would like to be with this project in Ontario and we would like to make it feasible. If we find out that we can't, then we will look at other places," he said. "We have a favorable approach to the realization of this project in Ontario and I would be glad if we could make it feasible."
If the Windsor project goes ahead it would be only Ontario's second major new plant in about a decade.
Of 17 new North American auto plants built since 1990, just one is in Canada. Seven were built in the U.S. deep south and six in Mexico, where politicians have been more willing to woo automakers with multimillion-dollar incentives. The rest were elsewhere in the United States.
Federal Industry Minister Allan Rock said the government was in talks with many potential auto sector investors.
"We hope they do open new plants here," he told reporters in Ottawa.
"As to the question asked about money, we started a process some months ago with the whole auto sector ... to look at how Canada can continue to get investments from auto manufacturers, including incentives, to be competitive with other places, but no conclusion has been reached yet."
(Additional reporting by Randall Palmer in Ottawa)
($1=$1.53 Canadian)