Auto Service World
News   December 1, 2008   by Auto Service World

Ottawa, Queen’s Park Mull Automaker Bailout

The Canadian and Ontario governments have told the beleaguered U.S. based automakers that they have till the end of the week to submit their plans to become viable if they hope to receive assistance. Federal industry minister Tony Clement and Ontario Economic Development Minister Michael Bryant sent letters to Ford, General Motors, and Chrysler–all of which have significant presence in Canada–that asked for assurances that restructuring plans included the continuation of Canadian operations.According to noted consultant Dennis DesRosiers, the auto industry is Canada’s largest employer, with more than 700,000 jobs — 400,000 in Ontario — and one in seven Canadian jobs at least partly tied to it.About 85% of the more than 5 million cars produced in Canada each year are sold in the United States, or 14% of total North American production.”Before we consider committing taxpayer dollars, the government needs to see solid, sustainable plans from the automakers as they pertain to Canadian operations,” federal Industry Minister Tony Clement said in a statement.Chrysler Canada Inc. reportedly asked Ottawa for an $800 million rescue package, while General Motors Corp. is reportedly seeking $2.8 billion.The move parallels that of the U.S. government that has given the companies until Dec. 2 to submit restructuring plans for their American operations, the letters noted.Some reports have pegged the survival of Canada’s Conservative federal government on the reaching of a deal. The minority Conservative government is under threat from a confidence vote spurred by their lack of a stated financial stimulus package for the economy at large. That vote has been put off till December 8 while the Harper government retools its position.The letters ask the automakers to answer several questions including the effects of restructuring on Canadian suppliers and distributors, about the global competitiveness of their Ontario plants and how they will ensure production of energy efficient cars in Canada.The companies are also asked about their Ontario Pension liabilities.

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