Ford Motor Co. has decided to build its new engine in Mexico after it was unable to reach a deal with the federal and Ontario governments to bring the investment to Windsor, Ont., Unifor said Friday.

Both levels of government suggested that they would not provide public money for the project because the automaker wouldn't make certain job and economic commitments.

In a news release, Unifor said it had hoped that months of discussions between Ford, two levels of government and the union would result in "significant investment which would have secured the production of a global engine at the Windsor facility."

It has been confirmed that the global engine will be built in Mexico, Unifor said.

“We are disappointed,” Unifor national president Jerry Dias said in the release. “The auto industries that are flourishing around the world are ones where there is a deep commitment from government and an understanding of the importance and wisdom of investment – which always pays dividends.”

Dias called the decision a significant blow, saying the program would have stabilized the Windsor operation for a decade, bringing a new engine program to the facilities.

"This was a project that was earmarked for Mexico and we tried to have it diverted to Canada," he told Reuters. "We were close but just couldn't get it over the finish line."

'Unprecedented request' by Ford

Both the federal and provincial governments said they could not come to terms with Ford on financial assistance.

"Our Government and the Government of Ontario were recently approached by Ford with an unprecedented request and after weeks of discussions it was determined that the terms laid out in Ford's proposal were not in the best interest of Canadian taxpayers," Jake Enwright, spokesperson for Federal Industry Minister James Moore, said in a statement. "We support projects that secure high-value jobs and deliver long term economic benefits to Canada. The terms laid out in Ford's proposal did not meet those objectives."

Enwright did not say how much money Ford requested.

In a separate statement, a spokesperson for Brad Duguid, Minister of Economic Development, Employment and Infrastructure confirmed that "we have reaffirmed our willingness to partner with Ford Canada where
it makes sense."

"The provincial and federal governments and Ford are unable to reach an agreement," Andrew Forgione wrote.

However, Duguid had previously told Radio-Canada on Friday that negotiations between Ford and the Province "haven’t come to a final close” yet.

Ford declines comment

Ford would not confirm whether it would be building its new engine in Mexico.

Ford spokesperson Whitney Eichinger would only say that "for competitive reasons, we cannot discuss future manufacturing or product plans."

"We meet with government on a regular basis to discuss a variety of issues. We consider these discussions to be confidential," Ford Canada corporate communications manager Michelle Lee-Gracey said in a separate email to CBC Windsor.

Friday, Ford’s chief financial officer Robert Shanks, addressed Windsor on BloombergTV during an interview with Matt Miller.

Miller suggested that Ford is “going to pull a $2-billion dollar investment out of Windsor, Ont.”

“We can't pull out something that was never going, so, no, that's not the case,” Shanks told Miller.

Investment in Windsor was expected to be in the neighbourhood of $2 billion and create as many 1,000 jobs, according to a report in the Globe and Mail.

Two months ago, Unifor Local 200 president Chris Taylor said  Ford was considering investing in either a new plant or an expansion of either the Essex Engine Plant or the Windsor Engine Plant.

Taylor said at that time, Ford was considering manufacturing the 1.5-litre and 1.6-litre engines for the Ford Fiesta in Windsor.

Letter of agreement doesn't come through

Taylor previously told CBC News that back in 2012, the union negotiated a letter of agreement stating that if Ford produced a new engine product, the Windsor facilities would get first opportunity to manufacture it, provided a number of criteria are met.

Taylor told CBC Windsor on Friday that one of the caveats in that agreement was government money. Taylor claims not enough government money was offered to keep Ford in Windsor.

Outgoing Windsor Mayor Eddie Francis, who will not seek reelection, said the city offered Ford an $8.5-million tax freeze over 10 years in an effort to get Ford to invest.

Windsor mayoral candidate John Millson said at a news conference Friday that he knew of the decision Thursday.

"We can't lose this engine opportunity," he said.

Millson claims the Province knew last week, when Liberal Premier Kathleen Wynne visited, that Ford was going to Mexico.

Union to meet Sunday

Former Ontario Liberal Minister Sandra Pupatello, who is now the CEO of the Windsor-Essex Economic Development Corporation, declined to comment until the news was confirmed by Ford.

Unifor Local 200, which represents Ford workers in Windsor, is expected to hold a meeting Sunday to explain the decision to its members.

Earlier this month, Ford said it would add 1,000 jobs at its plant in Oakville, Ont. by the end of this year to build the 2015 Ford Edge crossover SUV.

With files from Reuters