If the United States Congress agrees a $15bn auto industry loan this week, the Canadian government is likely to be pressured to help its own automakers based in Ontario, the province’s premier has said.
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Dalton McGuinty told Reuters: “I expect that if Washington comes forward with an interim support package – a bridge to Obama, as they’re calling it – there will be a heightened pressure on us to respond with an interim package as well.”
McGuinty believes Canada would have to find a way to support the Detroit Three, all of whom have plants in Ontario, the 400,000 auto jobs in his province alone and the C$20bn (US$15.9bn) annual contribution to the economy.
Reports said the automakers want around C$6bn in loans, loan guarantees and lines of credit in Canada and presented restructuring proposals to both the Ontario and Canadian governments last Friday. McGuinty said experts were eyeing the proposals ahead of making recommendations on a final plan.
According to Reuters, he refused to comment on a report in Toronto’s Globe and Mail newspaper saying Chrysler Canada might shift production from two of its plants in Ontario to the US if it doesn’t get the C$1.6bn asked for in Canada. That would eliminate more than 8,000 Canadian jobs, the paper said.
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By GlobalDataCanadian Auto Workers union president Ken Lewenza, was surprised at the report, noting that local vehicle plants’ labour costs are competitive with the US. He urged the government to tell automakers that if they want to sell cars in Canada, they should manufacture in the country.
“We’ve always said if you want to sell in Canada you ought to manufacture in Canada,” Lewenza told Reuters after a meeting with industry minister Tony Clement.
The paper said Chrysler could shift minivan production from Windsor, Ontario, to a recently idled plant in St. Louis, Missouri [that made them until recently] and transfer large sedan production from Brampton, Ontario, to Detroit.
“The fact of the matter is both of those plants are very productive, both of those plants have had significant investment, both of those plants deserve better, and that’s a message I’ll send Chrysler,” Lewenza told Reuters.
Chrysler would not comment on confidential information submitted in its proposal but reiterated it wanted “to ensure Chrysler Canada’s substantial Canadian manufacturing and operational footprint is protected”.
Chrysler Canada chief Reid Bigland last week told Reuters that any US aid package would be spent in the US, leading to a “slow burn” of jobs in Canada, unless the government there offered an aid package as well.
The CAW told Reuters it had not talked with the Canadian government about taking private equity stakes in any of the Detroit-owned local automakers in exchange for concessions after the United Auto Workers union across the border said on Monday it was after a stake in General Motors and a seat on the board in exchange for any concessions intended to cut costs for the ailing automaker so it could qualify for government aid.
