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Detroit carmakers approach Canada for $6.8B in loans

 
3 900 views Dec 8, 2008
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Canada is currently responsible for about 17-20% of GM and Chrysler’s North American production

Canada is currently responsible for about 17-20% of GM and Chrysler’s North American production

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A decision on the U.S. government's loan package is expected to come from Congress sometime today, but already carmakers are approaching the Canadian government, seeking more aid. The $6.8 billion sought from Canada would still fall short of the $25 billion originally asked for from Congress, even when added to the expected $15 billion loan package.

“North American economic conditions now make it necessary for us to seek government assistance to sustain our business and supply chain,” said Arturo Elias, president of General Motors Canada.

The total of about $22 billion falls even further short of the $34 billion in combined loans sought on the carmakers' return to Congress last week,and General Motors and Chrysler are seeking about $2.4 billion of the Canadian loans as emergency funds, with the remaining $1.6 billion the two have requested to be doled out over the longer term.

Ford, on the other hand, has only requested a $2 billion standby line of credit - much like its request to the U.S. - to be used only if conditions get worse than they currently are, reports TheSpec. The company hopes to weather the storm without actually dipping into any government funds.

Canadian government officials seem initially wary of the request, though open to further consideration. Canada's Federal Industry Minister Tony Clement, who is familiar with the matter both in the U.S. and Canada, says the current situation is a preliminary consideration, and that "before committing taxpayer dollars, we need to review the plans to ensure that they have met our requirements," much like his U.S. counterparts have done.



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Comments (3)

  1. ma_Chris avatar Chris Posted: 12/9/2008 3:20am PST

    thats right americans.. canada is looking at giving YOUR companies nearly half as much money as you're going to give them.. and we have 1/10th the population as you do. the average canadian will give your companies 5x more money than you will.

    disclaimer: the auto industry is pretty big in canada too. we need it just as much as you do.
     
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  2. ma_SuperSkyline89 avatar SuperSkyline89 Posted: 12/9/2008 8:42am PST

    Ontario pretty much depends on the auto industry. I'm actually going to university in Oshawa, where GM is wreaking havoc with their damn truck plant. This city literally has nothing to its name besides that plant industry wise.

    If they get this money, the government had better put some seriously tough regulations on it. First and foremost being that not a single penny leaves Canada.
     
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  3. ma_Chris avatar Chris Posted: 12/11/2008 8:08am PST

    super.. the money is going to retooling those plants that are being idled. oshawa truck, ford's oakville plant that is losing the crown vic and already does the Edge and Flex platforms, ford's Essex engine plant that used to do v8 and v10 truck engines but will probably get the 4.4L V8 diesel and a new 4cyl diesel (so go the rumours).

    expect honda and toyota to jump on the band wagon cause they both just built billion dollar plants along the 401 and you can expect they'll try to get some money based on the investments they've made.

    also GM is about to pull out of windsor entirely because of the old transmission plant's products being phased out. some of this money could be used to entice them to stay. also, windsor has the Caravan/Routan plant here.. if chrysler goes under, you can expect that money to go towards facilitating VW buying out that plant, or otherwise securing those 3000 jobs.

    you think oshawa has nothing besides auto industry.. take a drive down to windsor some day. what isn't auto plant is tool and die shops, small engineering firms, and industrial contractors that feed off the automotive contract business. if the big 3 died tomorrow, you'd have 250,000 people turn nomad.
     
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