Canada Will Provide Funds to Automakers Contingent on US Package
14 December 2008
CBC. The Canadian Federal government and Ontario will offer proportional funds to Canada’s auto industry if a proposed $14-billion US aid package somehow comes through for the automakers in Washington. The support would also be contingent on GM, Ford and Chrysler working together with parts suppliers and unions for a long-term solution for their industry.
Speaking to reporters in Toronto, [Industry Minister Tony] Clement said the proposed aid to Canada’s ailing auto sector would amount to approximately 20 per cent of the US proposal, or about $3.3 billion Cdn. The US bailout appeared to have died late Thursday night after hours of heated negotiations between lawmakers, representatives from automakers and unions. But lawmakers said they still hope an agreement on the Democratic- and White House-backed plan could be reached.
The Canadian subsidiaries of the Detroit Big Three automakers had asked Ottawa and Ontario for financial aid that could total as much as $6 billion.
It's Xmas time again!
That's over $555 000 per Canadian Big-3 employee.
Big-3 Canadian workers may now get the huge pay raise they asked (from $71/hr to $79/hr) and stay home with full pay for months because the gas guzzlers they produce will not sell any better.
Unbelievable but true.
How long will ordinary tax payers accept that.
Posted by: HarveyD | 14 December 2008 at 05:14 PM
In Canada the Parliament has been "prorogued" which means the gates to Parliament are to be locked until Jan 26th 2009.
This was done to prevent a coup by the Liberal-NDP-Parti Quebecois Alliance.
In the mean time, apparently, this does not prevent the Tory's Trade minister, Tony Clement, from awarding the $3.3B to the private sector despite the fact that give-aways of taxpayers money to the private sector are not going to be popular.
We are in a capitalistic system when I last looked. If there is no product demand (there isn't) and a company has been mismanaged then that company should go under.
This obscene blackmail "to save jobs' is being floated this side of the border also. The difference is that today in Canada, unlike America, we no longer have our political processes open to block it.
The only mitigating circumstances are that Clement has at least said he will wait for the americans to make the first move.
Posted by: T2 | 14 December 2008 at 06:56 PM
T2:
Well said.
As you know, unlike USA, bail outs and give aways can be done by the Canadian government without approval by the House of Commons nor the Senate.
The power to spend is very different north of the border. However, the opposition parties would do even more to gain more votes in the coming general election.
Can bail outs save mismanaged car industries? In a period of local over-production with non-productive overly paid unions members, it could be a better idea to let one or two of the Big-3 fold.
Bail outs should have strict conditions such as detailed goals (step by step) transition fo affordable PHEVs and BEVs. Penalities, i.e. lost of bail outs $$$, should be imposed when transition goals are not met.
Bail outs should not be for business as usual. Manufacturers who will not adhere to a strict transition plan should not get bail out $$$$ and should fold, freeing funds for others.
Posted by: HarveyD | 15 December 2008 at 09:25 AM