U.S. must move first on auto aid: Clement
OTTAWA–A $3.4 billion bailout package from Ottawa and Ontario for the struggling Big Three Canadian automakers appears in flux as the Bush administration hesitates and the Harper government says it won’t come through with aid unless Washington does so first.
"Unless there’s a fix in the United States, it’s very difficult for us to do something independently of that," Industry Minister Tony Clement said yesterday on CTV’s Question Period.
Clement’s announcement on Friday that Prime Minister Stephen Harper and Ontario Premier Dalton McGuinty had reached agreement on a conditional plan to help the industry raised expectations that an emergency assistance package for the Canadian arms of General Motors, Chrysler and Ford would be on the way soon.
Both GM and Chrysler have said they have only enough cash to stave off bankruptcy for a few more weeks. While Ford is not facing an immediate cash flow crunch, it is asking for a government-backed line of credit to help it in future.
The Harper government’s long-awaited response to the carmakers’ pleas came on the same day President George W. Bush pledged to provide last-ditch assistance to save the U.S. auto sector.
Bush’s move came after Republicans in the U.S. Senate handed the industry a devastating loss by refusing to approve an interim $14 billion (U.S.) rescue plan.
The White House said yesterday it did not expect any announcement on the U.S. plan before Bush returns from Iraq.
But Republican Senator Bob Corker, who helped block the $14 billion loan package, said it appeared the White House hadn’t decided on its next move immediate payday loans online.
In Canada, Clement said he is still optimistic that the U.S. government will come through with a bailout.
"The Bush administration has made it pretty clear that they think a rescue is necessary to save the entire industry, to keep the economy from going further into troubled waters in the United States, so I expect over the next few days the U.S. administration to cross some t’s and dot some i’s," he told CTV.
But Clement acknowledged that aid for the industry here hinges on the decision in Washington. If the Americans reject a bailout, Canada’s options become "very limited."
The Canadian government, as it studied the situation, realized "that really the problem is in the United States." Canadian car sales may be down but autos are still selling in this country, Clement explained
"The big problem … is that Americans simply aren’t buying cars. And unless there’s a rescue or a fix in the United States," it’s hard for Canada to act on its own, he said.
Canada has not specified the size of the bailout. But, based on its proportion of the industry, it is estimated at $3.4 billion.
With files from the Star’s wire services