As well as asking the US Congress for a combined $34bn in loans (they’re likely to be allocated $15bn this week), Detroit’s Big Three are after at least $6bn from Canadian taxpayers as well.
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According to the Toronto-based Globe and Mail newspaper, the automakers told the central government in Ottawa and the Ontario provincial government the request could rise to $7.2bn if conditions worsen.
Ontario is home to most of Canada’s auto industry with the Detroit Three, Toyota and Honda all operating assembly and/or engine plants in the province.
The paper said General Motors of Canada asked for a $2.4bn loan with $800m needed by the end of the month, Chrysler Canada wants $1.6bn by 1 January and Ford of Canada has asked for a $2bn credit line it would only draw on if needed.
A spokesman for industry minister Tony Clement told the paper no decision on aid had been made while a federal source suggested the companies still needed to line up support from dealers, unions and suppliers.
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By GlobalData“Before committing taxpayer dollars, we need to review the plans to ensure that they have met our requirements and contain a long-term solution that sustains the industry in Canada,” Clement said.
The report said the Conservative government was unlikely to face opposition to an auto bail-out from the three parties that tried to unseat prime minister Stephen Harper this week. The Liberals and New Democrats – supported by the Bloc Quebecois – had pledged to provide assistance to the manufacturing sector, including the auto industry, if their coalition had succeeded.
Ontario economic development minister Michael Bryant acknowledged the auto sector was vital to Ontario’s economic prosperity but told the Globe and Mail: “I’m as sceptical as anybody would be and should be when it comes to governments using taxpayer dollars to loan money to any industry.”
The report said Chrysler and Ford provided few details of what they would do with the money while GM Canada said it had wanted “to sustain our business”.
GM requires “liquidity support to stabilise its operations, proceed with new product mandates in Oshawa, St. Catharines and Ingersoll [to] complete the restructuring initiated in November, 2005,” the company told the Globe and Mail.
The automaker added it would ask for $1.2bn more if markets deteriorate further, the paper said.
