Announcements of financial aid for auto makers help level the playing field with southern states throwing around cash like water, but now governments need to repair the mess at the Detroit-Windsor, Ont., border, auto industry officials and observers said yesterday.

Delays at the border -- which governments have started to address by earmarking $300-million for infrastructure improvements -- have contributed to Canada losing at least one new auto parts plant and the approximately 600 jobs it would have created.

The company is German-based Dr. Schneider Automotive Systems Inc., which chose Michigan ahead of Chatham, Ont., earlier this year when it was looking to set up shop to serve auto makers.

"The companies they were supplying to did not want them to be located on the Canadian side," said Bruce Birgbauer, a Detroit lawyer who was a consultant for Dr. Schneider.

"My own belief is that that is probably the No. 1 issue for companies seeking to locate in southwestern Ontario," Mr. Birgbauer said yesterday. "It's the single biggest obstacle to be overcome."

Improvements to infrastructure -- at the Detroit-Windsor crossing in particular -- were identified by the joint industry-government study group, the Canadian Automotive Partnership Council (CAPC), as one of five key areas where governments needed to act.

"We've got commitments, but there's still work to be done," Michael Grimaldi, president of General Motors of Canada Ltd. and co-chairman of CAPC, said yesterday.

In terms of a traffic light, action on the border is probably a yellow, Mr. Grimaldi said.

Gerry Fedchun, president of the Automotive Parts Manufacturers Association of Canada, said his members have lost contracts and some plants have closed in part because of troubles shipping parts across the border.

"Nine-eleven was almost three years ago," Mr. Fedchun said, "and we still don't have any construction or even a set of drawings."

Their comments came one day after Ottawa joined Ontario in offering $500-million to auto makers to upgrade existing plants with leading-edge technology or to build new factories.

Ottawa will provide about $200-million to GM Canada for that auto maker's $2-billion Beacon Project, which involves overhauling several assembly and parts plants. Another $100-million goes to Ford Motor Co. of Canada Ltd. for a flexible assembly plant in Oakville, Ont.

"For Canada to attract new investment, it was becoming increasingly apparent that there needed to be strong government support," said Mr. Grimaldi, who welcomed the announcement both as president of GM and co-chairman of CAPC.

"People are recognizing the importance of the auto sector and that was really one of the reasons we got together," he said. In terms of the traffic light scale, the fiscal policy and investment -- another key priority the group identified -- rates as yellow, tending toward green, he added.

GM Canada's project includes investments at Oshawa, Ont., assembly plants, parts and engine plants in St. Catharines, Ont., and a joint-venture assembly facility in Ingersoll, Ont., as well as expanding research and development activities.

"What we have to do is invest in the next generation of flexible manufacturing, the next generation of paint shops," Mr. Grimaldi said. "We're going to make significant investment here to make sure Oshawa remains at the top of the list in terms of automotive manufacturing complexes."

A key question is whether the initiatives by the federal government and Ontario's earlier announcement of a similar $500-million fund will attract new assembly plants, as the cash offered by Alabama, Mississippi and other southern states have done.

"Over all, our costs are at worst no more than the U.S. south and our labour is probably better," said Felix Pilorusso, who heads Pilorusso Consulting Inc. in Toronto.

"What we don't have that the southern U.S. has is the growing market," he said.

The flood of assembly plants into North America has not ended, added Michael Robinet, vice-president of forecast services for CSM Worldwide Inc., an automotive consulting firm based in Northville, Mich.

The border delays are probably a factor in Canada losing out on new assembly plant investment in recent years, he added.