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February 28, 2009, 7:24 am
Canada May Issue More Auto Loans

Sandra Pupatello, Ontario minister of international trade and investment, described her Canadian province as “the largest jurisdiction in North America that builds cars.”
Sandra Pupatello, Ontario minister of international trade and investment.

More than Michigan? Yes, according to a survey in February 2006. Ms. Pupatello said Ontario builds 2.5 million cars and trucks annually, has 125,000 workers at the assembly level and another 250,000 “associated with the auto sector generally.” So, obviously, the outcome of bailout talks between the Canadian government and automakers in Canada is crucial to keep production levels on track in the province.

Together, the Canadian and Ontario governments pledged $4 billion (Canadian) in emergency loans to the Canadian subsidiaries of General Motors and Chrysler last December, in a deal that also included some perks for auto-parts suppliers. As part of the aid, CBC News reported, G.M. and Chrysler would have to accept executive pay limits, pay money owed to Canadian parts suppliers, issue weekly financial summaries and report any transaction more than $125 million.

“The amount is in the $4 billion range, but there is some speculation that the talk is going further than that,” Ms. Pupatello said. The figures are pretty unprecedented for us, but we haven’t finished the conversation.” She said that Ford’s Canadian operation was not asking for bailout funds, but was having separate discussions on credit issues.

As befits her role, Ms. Pupatello is a booster for Ontario’s auto industry. “We have Ford, G.M., Chrysler, Toyota, Honda and Suzuki,” she said. “Toyota just opened its second plant in September, and we are the only place outside of Japan where Toyota builds the Lexus. And Honda recently doubled the size of its facility here.”

Ms. Pupatello said that health care for auto workers was carried by the provincial government in Canada, that electricity costs are lower and that the North American Free Trade Agreement makes the national border no great obstacle.

Along the Highway 401 corridor that connects to Windsor, across from Detroit, Ontario has 450 parts suppliers whose output is integrated into American auto manufacturing. “A part may cross the border 15 times before it is fully built into a car,” Ms. Pupatello said.

After World War II, the British auto industry adopted the slogan “export or die” and aimed a significant percentage of its output at foreign markets, particularly the United States. Canada is already there: 85 percent of the vehicles built there are destined for the United States.

LINK:Canada May Issue More Auto Loans - Wheels Blog - NYTimes.com
 

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Canada open to automaker aid after deadline-report

Canada open to automaker aid after deadline-report
Sat Feb 28, 2009 9:34pm GMT



TORONTO, Feb 28 Canada's industry minister said the government is willing to negotiate an aid deal with General Motors Corp (GM.N: Quote, Profile, Research) and Chrysler LLC past an end-of-March deadline, the National Post newspaper reported on its website.

The article, citing an interview with Industry Minister Tony Clement on Friday, said the Canadian government has also looked at 'Plan B' scenarios in the event one of the companies goes bankrupt.


It reported that Clement said there are signals the administration of U.S. President Barack Obama is willing to extend a March 31 deadline by which GM and Chrysler -- controlled by Cerberus Capital Management LP [CBS.UL] -- have to submit certified reports to the U.S. Treasury as a condition for U.S. government aid.

"As long as they are still viable, there's no rush," Clement said. "If they wanted a month extension, if that's what makes them have the best plan possible, with all of the stakeholders at the table -- CAW (Canadian Auto Workers union), U.S. government, Ontario government -- that's fine by us."

In late December, Canada said it was prepared to provide C$4 billion ($3.2 billion) in emergency loans to the cash-strapped automakers. GM Canada is eligible for loans of up to C$3 billion under the package, while Chrysler Canada is eligible for up to C$1 billion.

General Motors on Thursday posted a loss for 2008 of nearly $31 billion and said its auditors were likely to cast doubt on its viability as it seeks an expanded federal bailout to stay afloat.

LINK:RPT-Canada open to automaker aid after deadline-report | Markets | US Markets | Reuters
 
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