Canada Follows the U.S. Terms for GM/Chrysler; Harper Still Worrying About the “Eased” ‘Buy-American’ Clause in Stimulus Package

~~By InsightAnalytical-GRL

About a month ago we posted on the subject of how GM and Chrysler were begging from bailout money from the Canadian government. (See: The SCANNER–International/Political Edition, 2/24/09 (Which Deficit is Obama “Halving”?; Canada Rubs U.S. Nose into Its Stable Banking System; GM/Chrysler Beg for Bailout Help in Canada, Too; Half of Foreign Criminals in Canada Are Fleeing to the U.S. [???]).

Here’s the relevant excerpt:

GM, Chrysler ask for billions in Canadian aid

General Motors has outlined a restructuring plan that would cut its Canadian workforce to 7,000 and seek as much as $7 billion from the federal and Ontario governments, while Chrysler is requesting around $2.8 billion in aid.

GM didn’t specify how much it will ask for, but Reuters quoted federal Industry Minister Tony Clement as saying the company is asking for between $6 and $7 billion.

The Canadian government doesn’t seem to want to bailout CAW pensions…time will tell.


Here’s an update on what’s going on now…right in tandem with what the Obama Administration is doing:

GM, Chrysler scolded but given more time to restructure

Canada, Ontario provide $4 billion in loans to troubled manufacturers

Political leaders on both sides of the Canada-U.S. border are giving General Motors and Chrysler extensions on deadlines to come up with viable restructuring plans, saying the auto manufacturers fell short in their first attempts.


Disappointment in Canada

Canadian politicians also expressed regret that GM and Chrysler could not come up with viable plans.

Federal Industry Minister Tony Clement, along with Finance Minister Jim Flaherty and Ontario Economic Development Minister Michael Bryant, said GM has 60 days to come up with a plan for its Canadian division, while Chrysler has 30 days to reach a deal with the Canadian Auto Workers union and with Fiat.

At the same time, Clement said the first of the $4 billion in interim loans to the two companies is going out. Chrysler will get $250 million on Monday of the $1 billion allocated, while the first of $3 billion in funds for GM will begin to flow in early April.

“We are making this strategic investment to support an orderly restructuring of a critical industry with [the] goal of ensuring that Canada maintains its 20 per cent production share in the future,” Clement said.


Canadian Auto Workers president Ken Lewenza said the union won’t reopen its collective agreement with GM Canada despite pressure from politicians that more cost restructuring is needed.

“We did it once 10 months ago and we did it again less than a month ago,” he said. “Opening up bargaining won’t resolve this problem.”

Lewenza said the union is still trying to work out a new collective agreement with Chrysler in advance of a March 31 deadline.

The email newsletter I receive from Radio Canada International sums it all up this way:


Two struggling Canadian automakers, Chrysler and General Motors, were offered help on Monday by the federal government and the government of Ontario. The two companies will receive bridge loans totalling CDN$4 billion to help them to survive. Chrysler would receive CDN$1 billion and General Motors would get $CDN$3 billion. Further government loans will depend on whether the two companies can present acceptable restructuring plans. Tony Clement, Canada’s industry minister, has rejected plans that were submitted earlier, saying that they fail to ensure the companies’ long-term survival. General Motors has until the end of May to present its new plan. Chrysler has until the end of April. Chrysler’s plan must include the company’s merger with the Italian carmaker, Fiat, that was announced on Monday. The plans will depend in large measure on negotiations with the company’s unionized workers. The Canadian Autoworkers Union welcomed the Chrysler/Fiat merger as long as it preserves the Canadian auto industry. CAW’s negotiations with Chrysler will continue, but the CAW refused to renegotiate a deal with General Motors that was arranged within the past month. The CAW also welcomed the government’s insistence that the two American-based companies commit to maintaining 20 per cent of their North American production in Canada. The government offer also requires that company executives agree to limits on their compensation.

Now, here’s another rather ironic bit from the same newsletter, considering how tightly bound together Canada and U.S. are.  (See: What’s Going On North of the Border: The Canadian Economy and Stimulus Plan & THE PROPOSED NORTH AMERICAN COMMUNITY/NORTH AMERICAN UNION: 2010 Is Just Around the Corner)


Prime Minister Stephen Harper says the danger of protectionism is one of his major concerns in the global economic crisis. He’s worried that if protectionism becomes a global option, the world could face a depression similar to the one in the 1930s when countries introduced trade barriers to save homegrown industries. The measures only accelerated and deepened the global economic downturn. Mr. Harper is concerned that the United States stimulus plan includes Buy-American clauses for recipients of government bailout money. Such a plan could hurt Canadian exports to the United States. Mr. Harper made his comments as he prepares to attend a Group of 20 summit in London this week.

In early February, the Senate “eased” the Buy-American” clause as Obama proclaimed he didn’t want a “trade war”…The EU, Canada, and Japan had protested; only the UK hadn’t complained at that point.

US Senate eases “Buy-American Provision in Stimulus Package”


The measure had sparked fears of retaliatory measures by US trading partners and a possible spiral of protectionism in an already reeling global economy.

The requirement to favour US-made supplies to be used in infrastructure projects, included in a nearly 900-billion-dollar package being considered by the Senate, was softened to allow for exceptions as required by US trade agreements, broadcaster MSNBC reported.

Apparently, Harper isn’t completely satisfied with the changes to the clause. Maybe he doesn’t trust Obama or the U.S. Senate…probably a wise stance to take.

5 Responses

  1. We’re hearing a lot these days about “viable” plans from the car manufacturers. By whose criteria are the proposals not viable? Do those genius car manufacturers in Washington have a better plan than the executives in Detroit?

    This is disgusting. Barack Obama will drive our own auto industry into bankruptcy, meanwhile throwing trillions of dollars at the greedy bastards on Wall Street who make nothing but spreadsheets.

    How hard is it to understand that a country which produces nothing is doomed? This mess we’re in right now is the direct result of Ronald Reagan’s idiotic belief in a “service economy”.

    • Right church, wrong pew! It’s not the auto industry we need to worry about losing (they did themselves in years ago); it’s American farms. Agriculture used to be a huge us industry, now the dimwits in Congress are trying to Monsanto-ize all farming and drive smaller farms (and farmers who refuse to use their rotten chemicals) out of business with million dollar fines.

      GM and Chrysler committed suicide, IMO. Ford is doing ok, but they revamped and offered more user-friendly vehicles. And for crying out loud, Daimler-Chrysler’s parent company is a multi-billion dollar corp. that buys out struggling companies and restructures them! Sorry, but they get no sympathy from me anymore. I understand wanting to defend workers rights, but what other sector of the economy hasn’t lost at least half of their retirement/pension in the Wall St. fiasco? Why should auto workers be the only ones that don’t feel the pain (besides, of course, our evil congresscritters)?

  2. Creeper is right – “a country that produces nothing is doomed”

    So Obama doesn’t want a trade war, and he will delete or tone down the clause in the bail-out that calls for U.S. Steel be used in the rebuilding and repair of our infrastructure. Of all the assinie things. To acquiesce to complaints from other countries, when our trade deficit is so high and still climbing, is one of the dumbest things he has done yet.

    Thousands of lay offs occur all across the U.S. every week. Jobs are being cut across a wide range of industries. A high percentage is the direct result of foreign competition. Our steel industry needs the purchase of steel for the infrastructure to stay in the U.S. Eventually as more and more money leaves the U.S. our business will be powerless to prevent such activity.

    My first thought about Ron Gettlefinger’s attitude was – what an arrogant SOB. But on reflection, he is trying to protect the rights of the auto workers. Unions most often go too far and need some reining in, but Gettlefinger has long criticized the corporate chase fights for fair trade agreements. For this I applaud him.

    Over the last 30 years the U.S. has run consistant and increasing trade deficits, resulting in a deficit of over $161 Billion at this time. For the month of January,2009 alone, the trade deficit was over $36 Million. And China is crying because our imports of their products has dropped somewhat.

    If the U.S. retailer has no customers (due to the recession) to buy the products how can he be expected to continue to import them?

    Too much of the American taxpayer’s money has already gone to foreign banks to help stabilize their countries. It’s about time to think AMERICAN. But with an egomaniac at the controls who is after personal acclaim and love fests above all else I hold out no hope for any improvement as long as he is behind the wheel.

    • Obama is a red herring. This whole mess is being done intentionally, and is part of the goal of TPTB. If you haven’t checked out today’s post at Logistics Monster about the Pilgrims group – do yourself a huge favor and do so. I’m still plodding through the info. Diamond Tiger has linked to, but it is obvious that these people have a plan, and it has been in places for over 100 years.

  3. OT

    IA, I just read at Logistics Monster that you were considering curtailing your blogging, and I left a comment, but I will also leave one here.

    I can understand how it would get to be a pain in the butt sometimes to try to keep information flowing the way you do, with all else that you do besides.

    But you would disappoint an awfully lot of people were you to go. Just look, you have almost 200,00 hits already and you haven’t been in business for that long.

    You seem to come up with information that we can’t get on other blogs. And your posts about your animals and plants are such a welcome respite from all this crap that we have to deal with each day. What would we do without your pictures?

    You are appreciated more than you can know. I speak from personal experience, but I know there are many others who feel the same way.

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