Chrysler gives ultimatum, threatens to pull out of Canada

March 12th, 2009 - 12:36 pm ICT by IANS  

Toronto, March 12 (IANS) Chrysler Wednesday threatened to pull out of Canada unless the Canadian government gives it billions of dollars in loans and allows tax concessions and workers take wage cuts.
With three plants in Canada, Chrysler is the second largest auto seller in the country after General Motors.

With its sales down 27 percent this February compared to last year, Chrysler is seeking $2.3 billion, including one billion in an immediate emergency loan, from the Canadian government to survive.

Speaking before a Canadian parliamentary in Ottawa Wednesday, Chrysler Canada president Thomas LaSorda said unless the government gives immediate loans and tax concessions and workers take 20 percent wage cuts, the auto giant cannot survive.

“The current success and long-term viability of Chrysler’s manufacturing operations in Canada is very much dependent on (those) three critical factors,” LaSorda told Canadian lawmakers.

“Chrysler LLC (its parent company in the US) cannot afford to manufacture products in a jurisdiction that is uncompetitive relative to other automotive jurisdictions,” he added.

He said worker wages and benefits at their Canadian plants cost the company $70 per hour and need to be cut by $20 immediately if Chrysler has to survive in this country.

The Chrysler president also demanded the Canada Revenue Agency not demand more cash or collateral in its on-going tax fight with the Canadian authorities.

The Canadian government alleges that Chrysler paid more than $1 billion in taxes in the US that it should have paid in Canada. For this violation, the government has placed Chrysler under a $500 million lien, and withheld $300 million in tax rebates.

Chrysler has just closed a shift at its Windsor plant just across the border from Detroit, throwing 1,200 Canadians out of work.

The plant makes Dodge Grand caravan - a minivan - which is Canada’s third largest selling vehicle.

With the auto giant already closing its two minivan-making plants in the US, LaSorda warned Canada that his company would move its Canadian operations to any of the two shut-down plants in America.

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