Chrysler threatens to pull out of Canada


The Canadian government wants GM and Chrysler to make further labor and legacy cost cuts

The Canadian government wants GM and Chrysler to make further labor and legacy cost cuts

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General Motors and Chrysler have told authorities in Canada they need as much as $8 billion in aid to stay afloat, more than double the original amount requested just three months ago, and in the latest twist Chrysler has threatened to pull out its operations if it does not receive the funds.

The Auburn Hills-based carmaker warned that it may have to close its Canadian plants unless it got sufficient labor concessions, as well as government aid and resolution of a tax dispute. The biggest issue are the labor costs, which are substantially higher than that of Toyota and Honda. As for actual government aid, Chrysler is seeking $2.3 billion, Reuters reports.

"Failure to satisfactorily resolve these three factors will place our Canadian manufacturing operations at a significant disadvantage relative to our manufacturing operations in North America and may very well impair our ability to continue to produce in Canada," Chrysler co-president Tom LaSorda told reporters following a testimony outside the country’s House of Commons finance committee yesterday.

Chrysler directly employs more than 9,400 people in Canada and a further 25,900 through its dealerships. Including suppliers and retirees, it said 100,000 people depended directly or indirectly on its Canadian operations, which last year manufactured more than half a million vehicles.

 
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