Hugo Miller and Reg Curren
Sunday, Dec 21, 2008
General Motors Corp. and Chrysler LLC will get C$4 billion ($3.3 billion) in government loans from Canada and the province of Ontario, a day after the U.S. agreed to aid to keep the two automakers operating.
General Motors’ Canadian unit will receive C$3 billion while Chrysler is set to get C$1 billion, the two governments said today. Borrowers must accept limits on executive compensation and also report “material transactions in excess of C$125 million or more,” the two governments said in a joint statement.
“This is a huge problem that faces the Ontario community and the Canadian economy by extension,” Prime Minister Stephen Harper said at a press conference in downtown Toronto today.
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Canada’s aid builds on the $13.4 billion in U.S. emergency loans announced by President George W. Bush. Canadian Industry Minister Tony Clement on Dec. 12 pledged to offer GM, Chrysler and Ford Motor Co.’s Canadian units federal and provincial aid “proportional” to the their contribution to North American production, which is about 20 percent.
“We will not allow catastrophic collapse” of the industry, Harper said. “But the auto companies have to change the way they do their business in a very serious way.”
The aid package is “not a blank check” and Canadian taxpayers expect the money to be used to renew the industry and involve all stakeholders in that process, Harper said.
This article was posted: Sunday, December 21, 2008 at 8:05 am