Ford Motor Co said on Friday it is seeking a C$2 billion (US$1.59 billion) standby credit line from the Canadian government, and General Motors Corp and Chrysler LLC are seeking undisclosed amounts as well as the Detroit Three struggle with a worsening economy.
Ford said it was seeking the credit line — “to be used only if the current economic crisis worsens” — but isn’t asking for any money up front.
Chrysler wouldn’t comment on the amount it was asking for, saying only that the figure was proportional to the US$34 billion that the three automakers were asking of the US.
Reid Bigland, president and CEO of Chrysler Canada, said in a statement that his company’s request was “temporary and fully repayable.”
Bigland said that Chrysler Canada would ensure Chrysler had sufficient funds to complete its restructuring activities during the recent unprecedented downturn in vehicle sales.
GM said only that it “requires liquidity support” to stabilize its operations, proceed with new product mandates in the Ontario communities of Oshawa, St. Catharines and Ingersoll and complete the restructuring initiated in November 2005.
“North American economic conditions now make it necessary for us to seek government assistance to sustain our business and supply chain,” GM Canada president Arturo Elias told reporters. “We will also work together with all our key stakeholders to review and agree to further necessary changes to our business model.”
Neither company provided details about the possible impact on jobs or plant closures, but GM did separately announce plans to temporarily lay off a third shift at its Oshawa car plant.
The company has announced plans to cut 2,000 jobs across North America.
Federal Industry Minister Tony Clement, who had traveled to Detroit and Washington with his Ontario counterpart to speak with the automakers, said the numbers were the first step in figuring out what, if any, aid would be granted.
Ontario Economic Development Minister Michael Bryant said earlier on Friday that he had received the proposal from the three companies, and warned the number was going to be big.
The Ontario government hadn’t promised any time commitment, and will examine the numbers further over the weekend, Bryant said.
Ontario, the heartland of the Canada’s auto industry, would be the hardest-hit province if one of the Detroit Three automakers filed for bankruptcy — something that’s considered a genuine threat now that the US bailout is on hold.
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