Tuesday, February 17, 2009

All Eyes on U.S Plan as Canadian Deadline Looms

(Karen Howlett — Globe & Mail)

General Motors Corp. and Chrysler LLC are just three days away from having to submit a plan to Canadian governments, outlining how they are going to make their operations in this country viable.

But as the clock ticks down, both the companies and their unionized workers are saying little about what steps they are prepared to take, making it impossible at this stage for GM and Chrysler to talk about production guarantees for Canada, Ontario Economic Development Minister Michael Bryant said in an interview yesterday.

“Understandably, not all the parties have laid down all their cards,” he said. “This is nothing more nothing less than an important negotiation, which involves a certain amount of manoeuvring on all sides.”

Mr. Bryant said the companies should reveal some hint about the fate of their Canadian operations today, when they submit a plan to the U.S. government outlining how they are going to slash costs and trim debt to make themselves viable. The deadline for presenting a plan to Canadian governments is Friday.

In the U.S. restructuring plans, the companies are supposed to discuss their global operations as well, Mr. Bryant said.

“I would anticipate that there would be some information about their non-U.S. operations.”

But the big question is whether embattled GM can restructure its operations without sliding into bankruptcy protection. The Wall Street Journal reported this weekend that the auto maker will offer a restructuring plan to the U.S. government that includes Chapter 11 bankruptcy protection as one of its options. Read more here.