With the intervention of governments north and south of the Canada-U. S. border, major Detroit-based automakers appear to be safe for the time being.
While there have been no assurances of long-term prosperity as of yet, the signing over of some $17 billion in emergency loans by the Bush White House, the commitment by incoming president Barack Obama to come to the assistance of the automakers, and the recent $5 billion promissory note from the U. S. treasury to GMAC will do much to bolster confidence in the sector.
North of the border, Canadian federal and Ontario governments have pledged more than $3 billion to the auto sector. Ontario Economic Development Minister Michael Bryant says the funds would avoid a “doomsday scenario” for the Ontario economy if the Detroit Big Three were to close down. The pledge came on the heels of dire economic projections from a provincially commissioned report. The report projected more than 150,000 immediate job losses, with over a half a million additional job losses over the next five years if Ford, Chrysler, and GM were to go out of business.
“We are talking about CPR, literally CPR, for a company to avoid it from going under and causing a chain of events that would be catastrophic to the economy,” says Bryant.
Editor’s note: In the fast-moving environment that currently pervades the automotive sector, readers are advised to watch for updates at www.autoserviceworld.com.
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