Automakers seek $6B aid package from Ontario, federal government

The Canadian subsidiaries of the Detroit Big Three automakers have asked the federal and Ontario governments for financial aid that could total as much as $6 billion.

GM Canada, Ford of Canada and Chrysler Canada made their requests Friday as they provided Ontario and the federal government with financial information and details of their restructuring plans that the governments asked for in return for considering a potential aid package.

Ontario Economic Development Minister Michael Bryant said GM is seeking an immediate $800 million bridge loan as part of a package of repayable loans that would ultimately total $2.4 billion.

Chrysler is also seeking a loan but did not publicly divulge the amount. However, the Canadian Press said it has learned the amount is $1.6 billion. It said Ford is asking for a $2-billion line of credit that it could draw upon if necessary.

Overall, the amount being sought is less than 20 per cent of what the automakers are trying to get from the U.S. Congress, which is being urged to provide a bailout package of $34 billion US. The Big Three have around 20 per cent of their total assembly production in Canada.

"They are somewhat proportionate … to the dollars that are being sought in the United States," Bryant said. "Whether or not they're exactly proportionate, or whether or not it meets their formula versus our formula, is the kind of thing we'll work on over the weekend."

Bryant said his officials will be working on the proposals and looking at the business cases, adding it would be premature to say whether they are detailed enough. If they aren't, he said the automakers have indicated they will provide more detail.

He said while the companies are providing sensitive market and financial information, a lot of it would have to be made public if the government decides to provide an aid package.

Earlier this week, Bryant and his federal counterpart, Industry Minister Tony Clement, announced the appointment of a special adviser with extensive restructuring experience to help assess the Canadian auto industry.

Lawyer Jim Arnett advised Ontario's premier on the restructuring of Stelco Inc. from 2004 to 2006, headed brewer Molson Inc. from 1997 to 2000 during a reorganization, and is chair of giant Ontario Crown corporation Hydro One.

Big Three press bailout case to U.S. Congress

In Washington, the chief executives of the Big Three automakers continued to make their case to the U.S. Congress for a $34 billion US bailout amid growing skepticism that it will be put together by the end of the year — if at all.

The heads of General Motors Corp., Ford Motor Co. and Chrysler LLC appeared before the House of Representatives Financial Services Committee on Friday, one day after getting a rough ride from the Senate Banking Committee for the second time in as many weeks.

A proposal to lend the automakers money from a $700 billion US fund created to rescue U.S. financial institutions has met with strong resistance from the administration.

Another proposal, favoured by the administration, would see money come from an already-approved $25 billion US fund for making cars environmentally efficient. But congressional officials point out that even giving them the entire fund would fall short of what the companies say they need.

On Thursday, President George W. Bush waded into the fray, telling NBC News: "No matter how important the autos are to our economy, we don't want to put good money after bad. In other words, we want to make sure that the plan they develop is one that ensures their long-term viability for the sake of the taxpayer."

The auto executives — who drove to Washington after being lambasted for making the previous trip in their corporate jets — are hoping to drum up enough sympathy and support for Congress to consider rescue legislation in an emergency session next week.

With files from the Canadian Press