Tony Clement reflects on 'dire situation' that led to 2009 auto bailout
‘We weren't bailing out a particular company, we were rescuing an industry,’ former industry minister says
It was a decade ago that the North American auto industry was sent into a tailspin after the Lehman Brothers bankruptcy triggered the largest global financial crisis since the Great Depression.
It sent shockwaves through the many cities where car manufacturing and parts formed the backbone of the economy.
To save the auto industry, the federal government and Ontario chose to give billions in support to General Motors and Chrysler to help them stay afloat — a decision that saw sharp criticism at the time.
Now looking back, Tony Clement, the federal industry minister during the crisis, told CBC Toronto the government wasn't just concerned about the auto industry being hit by job losses, but other related industries as well.
"It was a dire situation. We calculated the potential job losses in Canada of upward of 400,000," Clement recalled.
"We looked at it from the point of view, we weren't bailing out a particular company, we were rescuing an industry on a time-limited basis."
We couldn't afford to have the auto industry completely shut down.- Tony Clement, former federal industry minister
In Windsor Ont., when the Chrysler plant closed, it was the beginning of many anxious days for workers like Dan Boshart.
He had over two decades of experience, but with the auto industry on shaky ground, his retirement was now up in the air.
"I was wondering if I was ever going to have a pension, ever going to be able to retire. Thinking about how I was going to survive. What I was going to do if I lost my job."
Jobs at stake
Clement says the government made saving jobs a priority and worked closely with the U.S. government to save GM and Chrysler.
"You're dealing with hundreds of thousands of jobs at stake at a time when there was practically no economic activity," he said.
Dozens of auto parts businesses, as well as the companies that supply them, were affected.
"This was a time when we couldn't afford to have the auto industry completely shut down, so from that perspective we all worked together."
While Boshart didn't lose his job, he says others did or had their hours or pay reduced,
Former union head Ken Lewenza says people who didn't work in auto were affected indirectly. That included everything from restaurateurs to retailers in these communities.
"There was fear all over. Everybody that was relying on the paycheques of those that were faced with these insecurities also cut down, because nobody was spending," he said.
Now 10 years later, our economy is still recovering, with experts saying the unemployment rate and the Canadian dollar still haven't come back fully.
But Clement says he's happy with the decision the government made.
"I think we made the right call based on the circumstances that existed at the time," Clement said.
"When you're talking about hundreds of thousands of jobs, you can't wake up in the morning and say, 'I'm going to forget about those jobs. Those people don't exist.' That's not an option."
With files from Flora Pan, Kari Vierimaa and Dean Beeby