Auto Industry Divided Over Specifics of Aid, But Agrees Canada Needs to Help

(The Canadian Press)

As North American auto manufacturers plead with governments for even a fraction of the help they’ve given the foundering financial sector, industry players and analysts are divided over what form any potential aid should take.

But there is widespread agreement that Canada can’t ignore the issue or it runs the risk of being shut out of talks between the Big Three automakers and the U.S. government, leading to further job losses in this country.

“I think the Canadian government needs to be at the table now so it doesn’t get excluded, so it can have some impact on the outcome,” said Bill Pochiluk, president of West Chester, Pa.-based AutomotiveCompass.

“The costs of not helping are enormous.”

North American automakers - including Ford, General Motors and Chrysler - are reeling from the combined effects of slumping U.S. demand for their products and frozen credit markets.

The Detroit Three have said they need loan guarantees to help tide over the sector until demand in the U.S. recovers for North American-produced vehicles.

On Friday, Federal Industry Minister Tony Clement said he was investigating the possibility of a joint Canada-U.S. bailout of North America’s ailing auto industry.

The Ontario MP, newly named to an economic portfolio, said he’ll be on what he called a fact-finding mission this week to Detroit and Washington and a common cross-border aid package is on the table.

No decisions have been made about a joint effort with the U.S. to help automakers, Clement said Sunday on CTV’s “Question Period.”

“Car sales in Canada are still going up and up, but of course when 90 per cent of what you assemble gets exported to the United States, we are prey to trends that are very obvious in the U.S.A. right now,” he said.

“I think it’s prudent of me just to, in the first instance, get a sense of what is going on in the United States, what are they proposing for the American Congress, and then obviously that will be part, not the whole part, but part of what we can consider as the situation here in Canada.”

In Canada, the federal Conservatives have long rejected direct intervention in the auto sector, but Finance Minister Jim Flaherty said recently he may be willing to invest what he calls “transformational money” in auto plants with viable prospects. Read the complete article here.