Big Three seek funds in Canada 'if crisis worsens'

Toronto: Ford Motor Company said on Friday it is seeking a two billion Canadian dollar (Dh5.84 billion) standby credit line from the Canadian government, General Motors Corp and Chrysler LLC are also seeking undisclosed amounts.

Ford, based in Dearborn, Michigan, said it was seeking the credit line - "to be used only if the current economic crisis worsens".

Chrysler, with headquarters in Auburn Hills, Michigan, wouldn't comment on the amount it was asking for, saying only that the figure was proportional to the $34 billion that the three automakers were asking of the United States.

Reid Bigland, president and CEO of Chrysler Canada, said that his company's request was "temporary and fully repayable" and would ensure Chrysler has funds to complete its restructuring activities during an unprecedented downturn in vehicle sales.

GM said only that it 'requires liquidity support' to stabilise its operations, proceed with new product mandates in the three areas of Ontario, and complete the restructuring initiated in November 2005.

"North American economic conditions now make it necessary for us to seek government assistance to sustain our business and supply chain," said GM Canada President Arturo Elias. "We will also work together with all our key stakeholders to review and agree to further necessary changes to our business model." Neither company provided details about possible impacts on jobs or plant closures, but GM did separately announce the temporary lay off of a third shift at its Oshawa plant as it cuts 2,000 jobs in North America.

Automakers have blamed tight or nonexistent credit, economic woes and lack of consumer confidence for the slump.

Numbers

Federal Industry Minister Tony Clement, who had travelled to Detroit and Washington with his Ontario counterpart to speak with the automakers, said the numbers were the first step in figuring out what, if any, aid would be granted.

He has said there are funds in the last budget to help automakers, despite the turmoil in Ottawa that prompted the Governor General to suspended Parliament until late January.

Earlier Friday, Ontario Economic Development Minister Michael Bryant said he had received the proposal from the three companies, and warned the number was going to be big.