The federal and Ontario governments will provide the Canadian subsidiaries of the Detroit Three automakers with C$4 billion (US$3.29 billion) in emergency loans, Canadian Prime Minister Steven Harper said on Saturday.
The announcement follows a pledge on Friday by US President George W. Bush to offer US$17.4 billion in emergency loans to General Motors Corp and Chrysler LLC.
Harper said Canada’s bailout plan, the equivalent of 20 percent of the US aid package, will help keep the plants afloat while the automakers restructure their businesses to retain one the country’s most important economic sectors.
PHOTO: AP
“We cannot afford, in the United States or Canada, the catastrophic short-term collapse of the Big Three automakers. The US has signaled that they are not going to allow these companies to fail, and we will do our share of the North American package to see that this doesn’t happen either,” Harper said at a news conference in Toronto.
Canada’s automotive industry represents 14 percent of the country’s manufacturing output, 23 percent of manufactured exports and directly employs more than 150,000 Canadians.
LARGEST INDUSTRY
The country’s largest industry within the manufacturing sector, it has been suffering from its slowest sales in 26 years and dwindling operating cash.
Ontario has agreed to provide C$1.3 billion of the total since the province alone employs about 400,000 auto sector workers — both directly and indirectly — and the industry is the mainstay of about 12 Ontario communities.
“In Ontario, we’ve got thousands of people and their families who rely on the auto industry to be on firm ground, so they can put food on the table and keep a roof over their heads ... No state or province employs more workers, and we’re not going to give that up,” said Ontario Premier Dalton McGuinty, speaking alongside Harper on Saturday.
The Canadian plan will provide General Motors Canada with loans of up to C$3 billion and Chrysler Canada will receive up to C$1 billion.
The companies will get the money in three installments, with the first portion coming next Monday.
Ford Motor Company Canada did not ask the government for any emergency loans.
Its parent company in the US says it doesn’t need any government cash now but would be badly damaged if one or both of the other US automakers went under.
NO BLANK CHECKS
Harper and McGuinty said that the government would not be handing over blank checks, saying that all stakeholders would be expected to make adjustments to reduce structural costs.
“Canadian taxpayers expect their money will be used to restructure and renew the automotive industry in this country,” Harper said.
“They expect all stakeholders to come to the table and work together towards sustainable long-term solutions to maintain our current production share of the North American market,” Harper said.
Harper’s statement was applauded by Canadian Auto Workers president Ken Lewenza, who said the union was willing to work with the automakers to protect jobs.
“This will ensure that the Canadian industry is protected and the numerous investments governments have made over the years will continue to benefit our communities. This is a very sound decision on the part of both governments,” said Lewenza, who has been lobbying the government to develop an aid package as soon as possible.
Harper also announced two additional steps the federal government would take to support the overall competitiveness of the auto industry.
Automotive suppliers will have greater access to accounts receivable insurance through Export Development Canada to compensate for the reduced availability of credit.
A new facility will also be created to support access to credit for consumers to improve the accessibility of car loans and dealer financing.
Similar to the US auto bailout package, the Canadian aid package comes with strings attached, including a request that parts suppliers get the money they are owed, that borrowers accept limits on executive compensation and that they provide the government with warrants for nonvoting stock.
US President Donald Trump yesterday announced sweeping "reciprocal tariffs" on US trading partners, including a 32 percent tax on goods from Taiwan that is set to take effect on Wednesday. At a Rose Garden event, Trump declared a 10 percent baseline tax on imports from all countries, with the White House saying it would take effect on Saturday. Countries with larger trade surpluses with the US would face higher duties beginning on Wednesday, including Taiwan (32 percent), China (34 percent), Japan (24 percent), South Korea (25 percent), Vietnam (46 percent) and Thailand (36 percent). Canada and Mexico, the two largest US trading
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
China's military today said it began joint army, navy and rocket force exercises around Taiwan to "serve as a stern warning and powerful deterrent against Taiwanese independence," calling President William Lai (賴清德) a "parasite." The exercises come after Lai called Beijing a "foreign hostile force" last month. More than 10 Chinese military ships approached close to Taiwan's 24 nautical mile (44.4km) contiguous zone this morning and Taiwan sent its own warships to respond, two senior Taiwanese officials said. Taiwan has not yet detected any live fire by the Chinese military so far, one of the officials said. The drills took place after US Secretary
RSS