GM, Chrysler expected to seek more Canadian aid: McGuinty
General Motors and Chrysler are expected to request more aid money when they release their Canadian turnaround plans and Ontario will do everything it can to meet those demands, Premier Dalton McGuinty said Wednesday.
"We know that there are going to be more asks involved," said McGuinty. "We know that we're going to have to do more to help support the sector."
The struggling automakers are now asking the U.S. for a staggering $39 billion US in government loans and are cutting 50,000 jobs in an effort to turn operations around.
When Canada announced $4 billion in emergency aid in December, both McGuinty and Prime Minister Stephen Harper indicated there would be a second phase that focused on the long-term viability of the automakers.
The companies are making a second round of Canadian demands Friday — and some estimate that means taxpayers will be on the hook for billions more.
On Tuesday, the companies presented their restructuring plans to Washington, which included General Motors cutting 47,000 jobs globally and shutting down five more factories and rival Chrysler paring 3,000 jobs as well as production.
Wait and see
Ontario will have to wait and see what's in the Canadian plans, McGuinty said, but acknowledged his government will have to do more for the auto sector.
"The only pitch I'm making to the U.S. decision makers on this is, we're part of the solution," McGuinty said.
"We're going to do everything we can to preserve our share and we'll just have to see what happens in that regard."
McGuinty called the apparent survival of Canadian jobs so far "relatively good news" but added the auto industry remains unstable and more restructuring can be expected.
Ontario is responsible for $1.3 billion of the $4 billion already announced, although that money never flowed because GM turned down the Canadian loan after receiving U.S. money.
The Chrysler loan is expected to be finalized in a few days.
Economic Development Minister Michael Bryant declined to speculate on a final price tag for the Canadian aid package, saying only the federal and provincial governments are sticking by the original commitment and continue to work with the automakers to deal with changing circumstances.
"I'm not going to draw the line now for the simple reason that we are in negotiations and we want to make sure that we get the best deal for the taxpayer that we possibly can, and ensure that it is a deal worth entering into," Bryant said.
Won't rule out job cuts
While he wouldn't rule out job losses, Bryant agreed with McGuinty that the plans spelled some good news for Canada.
"The report that came out yesterday from GM and Chrysler made pretty clear that these companies see Canada as a critical partner, arguably like no other that they have, and that the industry is integrated."
Finance Minister Dwight Duncan, who is preparing a recession budget that's expected to include a multibillion-dollar deficit, said the province will have to find a way to help GM and Chrysler because it just can't afford not to.
"The cascading impact of the collapse or the failure of the Detroit Three and its impact on our economy would be absolutely catastrophic," Duncan said.
"That's why, like the government of the United States, like the government of Canada, we're prepared to be at the table."