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.

MORE

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.

(SNIP)

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.

(SNIP)

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:

OTTAWA: GOVERNMENT OFFERS INTERIM HELP TO AUTOMAKERS

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)

WASHINGTON: PRIME MINISTER EXPRESSES CONCERN OVER GLOBAL PROTECTIONISM

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”

(SNIP)

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.

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. [???])

~~By InsightAnalytical-GRL

I heard a clip of The One yesterday talking about cutting that deficit on the news as I drove around town.

Obama said that he would halve the deficit….THAT HE HAD INHERITED.

Of course, the typical headline reads:

Obama pledges to halve budget deficit by 2013

By Jeff Mason and Caren Bohan Jeff Mason And Caren Bohan – Mon Feb 23, 6:42 pm ET

WASHINGTON (Reuters) – President Barack Obama pledged on Monday to cut the ballooning U.S. budget deficit by half in the next four years and said the country would face another economic crisis if it did not address its debt problems soon.

Oh, this Reuters story finally gets to the real point, 6 paragraphs into the report, out there in the area which usually gets cut from local papers picking up the story.

“We cannot and will not sustain deficits like these without end,” he said. “Today I’m pledging to cut the deficit we inherited by half by the end of my first term in office.”

Frankly I”m surprised the clip I heard on the radio even got aired…but I guess that most people driving around might be busy on the phone, talking to someone else in the car, or too busy drinking a Slurpee to really notice the magic words “deficit we inherited.”  And by the time they hit the TV “news”–well, I bet somehow those magic words will be buried in pictures and glowing reports. Since I don’t watch TV news, I don’t know if that forceful pledge will be played in full or if it will be truncated to just the first part of the statement and the “inherited” bit fades into the ether.  I guess it won’t matter in the long run, since it will go down the memory hole, unless some Republican decides to dust it off someday.

I do have a question, oh Messiah:  When do you cut the deficits YOU are creating by a half??

***

While we here in the USA wallow in this muck, the folks in Canada are trying hard not to smirk. Yesterday, Prime Minister Stephen Harper was visiting touting the financial stability of Canada’s banking industry. From The Toronto Star:

PM praises Canada’s financial sector on U.S. TV

Feb 23, 2009 12:53 PM

bruce campion-smith

Ottawa bureau chief

OTTAWA — Prime Minister Stephen Harper hit the Big Apple today — the heart of America’s economic meltdown — to boast about Canada’s stable banking system, warn against trade protectionism and note the insatiable appetite for oil south of the border.

SNIP

The prime minister sang the praises of Canada’s prudent banking and financial system, which he said can be attributed to “activist” regulation by Ottawa.

“We’re helped by the fact we have six major banks, three major insurance companies so it’s easier for the government to exercise moral suasion on the sector,” Harper said.

He said that Canada, while hit by the economic downturn, hasn’t suffered a meltdown of the financial sector or the mortgage foreclosures that have hit the U.S. economy so hard.

“We haven’t had to bail out any of our financial institutions,” Harper said. “There will be no government bailout of mortgages in Canada.”

***

But, it seems that Canada may not get off entirely scott-free of demands for government cash.  Guess who’s asking for help?

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.

MORE

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

***

I get a news summary from Radio Canada International every day (most of the news comes from the CBC) and noticed this short squib about how foreign criminals are heading out of Canada to the U.S.

2/22/07  10:37 PM

OTTAWA: REPORT CONCLUDES FOREIGN CRIMINALS ARE FLEEING CANADA

A new report to Canada’s government suggests that many foreign criminals might be fleeing abroad, mainly to the United States. It’s believed that about two thousand foreign criminals are hiding in Canada.  But a squad of special border police found that almost half of the criminals being tracked had left the country.  Last year, the auditor general criticized the agency for the large number of missing people.  There are concerns that the list of high-priority cases maintained by the Canada Border Services Agency is out of date.  The agency is responsible for deporting unwanted foreigners.  It has 1,973 priority cases for whom removal warrants have been issued.  The Agency removes about 12,000 people from Canada each year.  About 13 per cent are classified as criminals.  Three out of four of them are failed refugee claimants.

If you follow the link, you’ll get the current day’s news.  The funny thing is, however, the day I searched for this story, it wasn’t there. In fact, of all the story summaries I received in the RCI newsletter, this story about foreign criminals was the ONLY story that wasn’t up at the site.

The question is: WHY??

The bigger question is: WHO are these “foreign criminals,” how successful is the U.S. in finding them…and WHAT are they up to here in the U.S.?

***

By the way, the RCI site has extensive information on how to relocate to Canada, in case you want to get out of the U.S. (Scroll down a bit down the page to get to the information.)    Maybe if I were younger…