The federal government has announced it is giving two manufacturers located in Guelph and New Hamburg $6.6 million to buy equipment so they can boost productivity and generate jobs.

Hammond Manufacturing in Guelph – which builds electrical enclosures, cabinets, outlet strips and transformers – will receive $3.46 million from the Federal Economic Development Agency for Southern Ontario (FedDev Ontario) to expand to a new facility and make modifications to its existing facility.

Ontario Drive & Gear in New Hamburg – which makes custom gears and transmissions for the automotive and energy markets – is receiving $3.14 million to expand its engineering department by 10,000 square feet and build new product lines.

165 full-time jobs

"Our investments in the Hammond Manufacturing Company and Ontario Drive & Gear demonstrate our continued support for southern Ontario's manufacturers and producers," Minister of Small Business and Tourism and Waterloo MP Bardish Chagger said in a release. 

"Today's announcement reinforces our commitment to growing our local economy by enhancing productivity for our manufacturers, supporting job creation and helping businesses reach export markets."

Robert Hammond, president of Hammond Manufacturing, said the funding will help the company "improve our processes and systems" so they can compete in the global market.

Joel Wright, president of Ontario Drive and Gear, said the money they receive will help them leverage $10 million in private sector funding so they can "maintain our competitive position" in the world.

The funding is expected to help the two manufacturers create 165 full-time jobs.