Ford, GM and Chrysler Seek $6.8 Billion Government Loan from Canada
Having already appealed to the U.S. Congress for an emergency bailout, Detroit's Big Three are now stretching their hands across the border to Canada seeking billions of dollars in loans and credit lines. Ford Motor Company delivered its plan to the federal and Ontario governments on Friday detailing a request for access to a "stand-by" line of credit of up to $2 billion to be used "only if the current economic crisis worsens".Although both GM and Chrysler LLC announced on Friday that they submitted detailed operational and restructuring plans to Ottawa, neither disclosed the amount of money that they are asking for. However, the Canadian media is reporting that General Motors of Canada has asked for $2.4-billion in loans, with $800-million of that necessary before the end of the year while Chrysler Canada Inc. is said to be seeking $1.6-billion as soon as January 1.
According to Reid Bigland, President and CEO of Chrysler Canada, "Our request for a temporary and fully repayable loan from the Ontario and Canadian Governments is really two-fold. First, to ensure Chrysler has sufficient funds to complete our restructuring activities during what is an unprecedented downturn in vehicle sales caused by the global financial crisis and second, to ensure Chrysler Canada's substantial Canadian manufacturing and operational footprint is protected."
GM Canada President Arturo Elias said, "Regretfully, North American economic conditions now make it necessary for us to seek government assistance to sustain our business and supply chain."
"The company believes it has the liquidity to weather the current economic crisis, however, it is asking for access to government-backed loans in case the economy significantly worsens, or in the event that a major competitor is forced into bankruptcy," said Ford in a statement.
And if you're wondering about the number of people working in Detroit's Big Three Canadian operations, here are the official figures:
Ford has a workforce of 10,000 people in Canada, while an additional 19,000 people are employed in the more than 400 Ford and Ford-Lincoln dealerships across the country. General Motors occupies 12,000 workers nationwide and has approximately 700 dealerships and retailers across Canada. Chrysler has 9,800 workers while its Canada network of 454 Chrysler, Jeep and Dodge dealers across Canada employ around 24,000 people.
Related Story: GM, Ford and Chrysler executives were in Washington on Friday asking for $34 in government loans and credit lines but according to congressional aides, they only succeeded in getting a $15 billion short-term emergency loan
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