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Canadian Government Rejects GM, Chrysler Restructuring Plans

03/30/2009
Following the United States' lead, the Government of Canada has rejected restructuring proposals for the Canadian subsidiaries of General Motors (GM) and Chrysler LLC and refused the companies' requests for government bailout funds. "While the restructuring plans represent progress, they do not go far enough to ensure the long-term viability of these companies. Therefore, we are not certifying their proposals," says Minister of Industry Tony Clement in a statement. "Together with our U.S. counterparts, we believe that further fundamental changes are needed." The Canadian government has given both companies essentially the same directives as the U.S. government: Chrysler must come to an agreement with Fiat on a viable alliance, and additionally must come to terms with its Canadian union, which to date has rejected proposals from the company for concessions; GM must undertake a more concrete restructuring of its products and operations. The companies have been given the same deadlines for their Canadian subsidiaries as in the United States -- 30 days for Chrysler, 60 days for GM -- and will be given interim loans from the Canadian government to continue operations. The government will not seek changes to the companies' Canadian leadership. The Wall Street Journal says GM Canada has asked for CAN$6.5 billion to $7.5 billion in government aid; Chrysler Canada has requested $4 billion.

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