Canada Approves $4 Billion Auto Bailout Plan
Just a day after the US unveiled its plan to provide $17.4 billion to cash-strapped General Motors and Chrysler, Canada has announced its intentions to provide $4 billion of emergency loans to support the Canadian subsidiaries of the Big Three automakers. Harper also announced that auto parts suppliers will get improved insurance while vehicle buyers will get more access to credit.
“We will extend additional account-receivable insurance coverage for automotive suppliers through the Export Development Corp. And we will create a new facility to support access to credit for consumers. Taken together, these measures demonstrate that Canada is taking a holistic approach along the supply chain — manufacturers, suppliers and consumers,” he said.
Ontario will provide $1.3 billion with the rest funded by Ottawa. During his speech, Harper made clear that this was not a “blank cheque,” and by March 31st, 2009, the automakers must show that solid restructuring plans are underway. In another excerpt from his speech:
“We are doing this on the assumption that, obviously, we cannot afford — United States or Canada — a short-term catastrophic collapse but on the other hand we’re doing this with the knowledge that the automakers must change their way of doing business in a very serious way and must bring their products and their costs in line with the marketplace.”
It will be especially interesting to see whether or not Canada or the US callback their loans in the new year if the automakers fail to show solid restructuring plans. Given that so many jobs are at stake, this might not be an option regardless of the automakers progress in revamping their business models.
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December 20th, 2008 at 8:39 pm
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December 20th, 2008 at 11:36 pm
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December 21st, 2008 at 3:37 am
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December 21st, 2008 at 6:47 am
This seem to be a good news for the automakers.. Up to now, I am still hoping that economic crisis will vanish.. This is making most of the people in a difficult situation..
December 21st, 2008 at 5:26 pm
Just because an industry is considered high-profile and employs more powerful people (unions/lobbyists) doesn’t make it deserve bailouts. What about industries which are not rich or big enough to have lobbyists or political clout but are in equal dire financial need or have gone bust already – resulting in mass layoffs? The playing field must be even for all.
My 1/2 cent’s worth.
December 29th, 2008 at 3:14 pm
That sucks, my business is failing where is my bailout?
December 31st, 2008 at 1:00 pm
[...] under the $40 a barrel mark. In Ontario, the auto industry fights for its life after receiving a $4 billion bailout from the Canadian government. Saskatchewan fared better than the rest as a result of its diversity [...]
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October 31st, 2009 at 11:48 am
[...] original post here: Canada Approves $4 Billion Auto Bailout Plan | Political News and … By admin | category: auto canada | tags: 17-4-billion, auto, chrysler, dubious, [...]