Canada Agrees on Conditional Auto Aid Plan

Canada agrees on conditional auto aid plan as part of larger US bailout

Canada's federal government and the province of Ontario agreed Friday to provide $3.5 billion Canadian dollars ($2.8 billion) for the Canadian auto industry.
Federal Industry Minister Tony Clement said that is the equivalent of 20 percent of the $14 billion that the Bush administration is considering in emergency aid for General Motors Corp., Ford Motor Co. and Chrysler.
Clement said the main auto manufacture restructuring will be done in the United States, but Canada is also prepared to provide help to save the troubled industry, which employs hundreds of thousands of direct and spinoff jobs in Ontario, which is across the border from Detroit in the U.S. state of Michigan.

"What we are signaling here tonight, both the governments of Ontario and Canada, is that we want to be part of the solution as well and it will be commensurate with the production that takes place here in Canada ... about 20 percent," Clement told reporters.
The Detroit Big Three automakers currently employ more than 30,000 people at car assembly plants in Ontario.
The move by Canadian politicians comes after the U.S. Senate rejected a $14 billion plan, endorsed by U.S. President George Bush and congressional Democrats, that would have provided quick loans to the Detroit automakers.

On Friday, GM, Ford and Chrysler were talking with the administration and the U.S. Federal Reserve about how they could still get the billions of dollars they say they need to survive. The talks included conditions that automakers would have to meet, said GM spokesman Greg Martin.
The administration said no decisions had been made on the size or duration of the new bailout plan, or what type of concessions might be demanded from the struggling automakers, their workers, stockholders or others.
Canada's federal government came under increasing pressure to announce a multibillion-dollar aid package for the auto industry even before the White House finalizes details of its planned bailout of the battered Detroit Big Three.

The president of the Canadian Auto Workers union said Friday that aid can't come quickly enough for General Motors, Ford and Chrysler and their Canadian subsidiaries.
"The Canadian government should be proactive, announcing a Canadian financing package conditional on a U.S. package coming together," CAW president Ken Lewenza told a news conference.
"We think if Canada was to move and move swiftly, then that would put pressure on the U.S. to respond more appropriately."
Both the federal and Ontario governments have been reluctant to hand out any aid without first seeing the details of a comparable U.S. package so they can match any conditions and provide a proportional amount of funding.

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