Canada unveils $3.5-billion bailout for auto industryDecember 13th, 2008 - 10:18 am ICT by IANS
Toronto, Dec 13 (IANS) Even as the US Senate rejected a $14-billion bailout for its three auto giants, Canada Friday unveiled its own $3.5-billion aid package for the struggling subsidiaries of General Motors, Ford and Chrysler.Since Canada accounts for 15 to 20 percent of the total production by Detroit’s big three, the Canadian package represents about 20 percent of the proposed the US bailout.
The auto industry of the two countries is so deeply intertwined that many auto-parts cross the border many times before the final vehicle rolls out.
More than 80 percent of all vehicles assembled in Canada by the Detroit giants are shipped back to the US.
Since the auto sector employs up to 400,000 Canadians - mostly in Ontario province where almost all plants are located - Tansport Mnister Tony Clement said here Friday that both federal and Ontario provincial governments were ready to throw a lifeline to the struggling sector.
But the Canadian package will come into force only when the US bails out the three parent companies in Detroit, the minister said.
Clement said, “What we’re signalling (to the US) here tonight is that we want to be part of the solution as well.”
The aid package is about half of what the three automakers have sought from the Canadian government.
GM Canada and Chrysler Canada have also sought emergency loans worth $2.4 billion from the government by the end of December to meet their cash crisis.
Urging the government to intervene quickly, Ken Lewenza, president of the Canadian Auto Workers (CAW), said Canadian plants of GM, Ford and Chrylser are facing “unprecedented shutdowns” due to US slowdown.
“I believe if the Canadian government intervenes, we can avoid this economic crisis in the auto industry,” Lewenza said.