Ottawa Promises Auto Aid Even Without U.S. Bailout

(Globe & Mail)

Federal Industry Minister Tony Clement said Ottawa is looking at providing aid to auto parts makers and car dealers, even if the U.S. government refuses to bail out the Detroit Three auto makers.

But Mr. Clement signalled it was unlikely the federal government would bail out the major auto makers in the absence of the U.S. deal, even as Canadian Auto Workers president Ken Lewenza urged Ottawa to do exactly that.

Mr. Lewenza’s plea came amid further signs of distress in the industry, as General Motors Corp. said Friday that it will cut 250,000 vehicles from its first-quarter production schedule by temporarily closing 21 factories across North America.

The move affects some plants in the U.S., Canada and Mexico. Some will be shut down for the whole month of January. Spokesman Tony Sapienza said normal production would be around 750,000 cars and trucks for the quarter.

GM and nearly all auto makers who sell in the U.S. are mired in the worst sales slump in 26 years.

But Mr. Clement said Ottawa is equally concerned about the “innocent victims” of the crisis – the auto parts makers and car dealers who are having trouble financing inventories and loans or leases for consumers.

“There are various aspects to the rescue asked, some of which remains relevant regardless of what the U.S. Congress does,” the federal minister said. Read more here.