Detroit Three seek $6.8 billion from Canada, Ontario

[DGthe3]

Wasn't sure if I should put this into the Canadian section or not. Figured it would get more attention over here.

Thespec.com

December 05, 2008
Romina Maurino, The Canadian Press
TORONTO — The Detroit Three automakers are seeking a total of $6.8 billion in loans and credit lines from Ottawa and Ontario, saying they need some of that money before the end of the year as they struggle with a worsening economy.
While only Ford Canada officially released its dollar figures today, The Canadian Press has learned that Chrysler Canada asked for $1.6 billion in emergency loans, while General Motors is seeking $2.4 billion in repayable loans.
GM is also seeking $800 million immediately to get through their liquidity problems, a source said.
Ford Canada said it was seeking a $2-billion standby credit line — “to be used only if the current economic crisis worsens” — but isn’t asking for any money up front.

Chrysler wouldn’t comment on the amount it was asking for, saying only that the figure was proportional to the $34 billion US that the three automakers were asking of Washington. Reid Bigland, president and CEO of Chrysler Canada, said in a statement that his company’s request was “temporary and fully repayable” and would ensure Chrysler has sufficient funds to complete its restructuring activities during an unprecedented downturn in vehicle sales.

GM said only that it “requires liquidity support” to stabilize its operations, proceed with new product mandates in the Ontario communities of Oshawa, St. Catharines and Ingersoll, and complete the restructuring initiated in November 2005.
“North American economic conditions now make it necessary for us to seek government assistance to sustain our business and supply chain,” said GM Canada president Arturo Elias.
“We will also work together with all our key stakeholders to review and agree to further necessary changes to our business model.”

Neither company provided details about possible impacts on jobs or plant closures, but GM did separately announce plans to temporarily lay off a third shift at its Oshawa car plant as it cuts 2,000 jobs across North America.
Automakers have blamed tight or nonexistent credit, economic woes and a lack of consumer confidence for the slump. They aren’t predicting much of a recovery in 2009.

Federal Industry Minister Tony Clement, who had travelled to Detroit and Washington with his Ontario counterpart to speak with the automakers, said the numbers were the first step in figuring out what, if any, aid would be granted.
“Before committing taxpayer dollars, we need to review the plans to ensure that they have met our requirements,” Clement said in a release. He has already said there are funds in the last budget to help automakers, despite the turmoil in Ottawa that prompted the Governor General to suspended Parliament until late January.
Earlier today, Ontario Economic Development Minister Michael Bryant said he had received the proposal from the three companies, and warned the number was going to be big. “The numbers are going to seem big to taxpayers because they are big,” Bryant said. “Exactly what those numbers are and whether or not they are too large, or in fact meet the needs of the companies, is something that we will get some advice from experts on.” The Ontario government hadn’t promised any time commitment, and will examine the numbers further over the weekend, Bryant added. “There is a desire for a bridge loan that would need to be satisfied by the end of the year from their perspective,” he said. “Whether or not we are going to provide assistance, whether or not Canada is going to provide along the timelines that the industry is requesting, is something that we are in fact looking at.”

Premier Dalton McGuinty, who was in Windsor, Ont., today, said it was too early say how much the province would be willing to give the automakers. “We’re not there yet; it’s just very, very preliminary,” McGuinty said. “We want to move as quickly as we can, but we don’t want to move so quickly that we end up with a response that is irresponsible given the legitimate demands of taxpayers.” The federal and Ontario governments had set a deadline of today for struggling automakers seeking financial to provide detailed financial information and a restructuring plan for their Canadian operations. They had asked the Canadian automakers to reveal their production plans, including how they will “ensure” that energy efficient cars are being made in Canada. The automakers were also asked for an analysis of its Ontario pension liability. All three automakers have pleaded to the American and Canadian governments for substantial financial aid to stave off bankruptcy and avert the loss of hundreds of thousands of jobs. Ontario, the heartland of the Canada’s auto industry, would be the hardest-hit province if one of the Big Three automakers filed for bankruptcy — something that’s considered a genuine threat now that the U.S. bailout is on hold.

[Camaro_Corvette]

I don't think they are going to get that one. But they can try.

[radz28]

Good luck. I think Detroit has a large stake of jobs over there so they might have some leverage.

[SS4EVER]

Yeah they do. I don't know if GM goes under or any of the big three it's just not the U.S Economy that's going to be screwed. Canada's economy will feel it too. Heck Australia was supposedly going to loan the Big 3 some cash I heard as well...

[radz28]

I forgot about the Auzies! DUH!!!

[Inspector 17]

Hey everyone might as well pitch in to help our friends at GM out.