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Chrysler offers Canadian Government $2.3B USD Ultimatum
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by TDH | March 12, 2009 at 09:45 am
74 views | 2 Recommendations | 1 comment
Chrysler is seeking to secure a $2.3B USD loan from the Canadian federal government. If the government fails to meet its demands, Chrysler has threatened to close all of its Canadian manufacturing plants.
Chrysler Canada threatened to close its manufacturing plants in Canada unless it can drop its labour costs in Canada, resolve a tax dispute here, and, on top of that, get a $2.3-billion US loan from the federal government.
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Tom Lasorda, Chrysler's president and vice-chairman addressed Canada's House of Commons industry committee on Wednesday, citing profitability concerns as justification for what essentially amounts to a multi billion dollar ultimatum.
"We have to close the gap. As a corporation with manufacturing operations in multiple jurisdictions, we cannot afford to manufacture products in jurisdictions that are not competitive."
Meanwhile, General Motors employees are voting on new cost-cutting measures to ensure the continued viability of the Canadian auto industry.
The tentative deal between the union and the struggling automaker, announced Sunday after only three days of talks, includes a wage freeze to September 2012, the elimination of an annual bonus and a reduction in paid time off, among other concessions.
Generally, when the Canadian Auto Workers union signs with one of the big three auto makers, the others fallow suit. On this occasion, though, Chrysler is apparently in a unique situation as it is also in dispute with the Canada Revenue Agency.
Part of Chrysler's ultimatum requires the resolution of this tax dispute.
Chrysler currently employs about 9 400 people in Canada, not including dealerships.
Most RecentMost Recommended Comments (1)
at 11:32 on March 12th, 2009
if it is just a loan then Canada should do it. otherwise they will loose 9400 jobs.