And the $6-billion that the Big Three domestic automakers are now seeking from the federal and Ontario governments is on top of what Mike said is $752-million in financial assistance to the industry from the two governments since 2004, including $200-million for Ford, $200-million for GM and $125-million for Toyota.
Layoffs, new plants with shifts shut down, pension plan payments deferred, and let's not forget that auto industry in Canada does not pay for health care.
Committee Chairman Barney Frank (D-MA) pointed out that the only cost difference between operating in the U.S. and Canada “has got to be entirely on health care.”
And there is no asssurances that there will not be further layoffs even with a bail out and further worker concessions. Unlike equity investments past performance does predict future performance when it comes to the auto industry. There is no job security in the auto sector no matter how much money gets thrown at it. And of course we know the only solution to this crisis is socializing the auto sector under workers control. Anything else is a band aid trying to patch a gaping wound.
Canada's three struggling automakers must come clean on plans to cut jobs if they hope to win taxpayer support for the $6 billion in aid they're seeking, Premier Dalton McGuinty says. McGuinty's push for details followed days of criticism from opposition parties worried that an aid deal could be cut with taxpayers knowing nothing about the fate of thousands of auto jobs and how their money will be spent. McGuinty noted the automakers have made public far less information about their plans in Canada compared with their U.S. parent companies, leaving lawmakers here in a difficult position in trying to sell an aid plan to taxpayers already feeling the pinch of the economic downturn themselves.
Overall, GM is seeking $800 million by year's end and $1.6 billion later, Ford wants a "standby" line of credit worth $2 billion and Chrysler $1.6 billion. GM, which is Canada's largest automaker, has signalled it may need another $1 billion if the rapid vehicle sales decline continues.Chrysler has already warned its car assembly plant in Brampton and minivan plant in Windsor may not be able to survive without financial help soon.
General Motors of Canada Ltd. is seeking "painful" cost cuts from the Canadian Auto Workers, as the Canadian units of the Detroit Three ask for financial help from Ottawa and Ontario. "What GM said is, 'We must share in this pain together. And we've got to come up with cost savings, Ken, that may be painful,' " CAW president Ken Lewenza said he has been told. The GM Canada request did not specify what cuts it is seeking, Mr. Lewenza said yesterday, but a union source said the company wants overall hourly labour costs trimmed and workers to give up some of their paid time off. Lewenza's comments came after the United Auto Workers in the U.S. revealed it will revise contracts with GM, Ford and Chrysler to delay billions of dollars in payments to a union run health-care trust. Furthermore, UAW president Ron Gettelfinger said the union would modify a jobs bank in which members on layoff receive up to 95 per cent of their pay. The CAW does not have a similar health-care trust or jobs bank in Canada at the three automakers. But even if CAW members worked for free for an entire year, Chrysler, Ford Motor Co. and General Motors Corp. losses are so massive that the savings from that move would offset just 11 days of losses at the three companies, CAW economist Jim Stanford told the meeting.
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