Do-or-die time for GM, Chrysler

WASHINGTON — The future of the North American auto industry was perched on a knife’s edge Monday after governments in Canada and the United States warned automakers to reinvent themselves or face bankruptcy.

Exterior view of General Motors' world headquarters in Detroit

WASHINGTON — The future of the North American auto industry was perched on a knife’s edge Monday after governments in Canada and the United States warned automakers to reinvent themselves or face bankruptcy.

U.S. President Barack Obama spurned General Motors and Chrysler in their pleas for more federal money, saying no more taxpayer dollars would be forthcoming until they dramatically altered their business plans.

“These companies — and this industry — must ultimately stand on their own, not as wards of the state,” Obama said in a statement at the White House.

Speaking a day after his administration ousted the chairman of General Motors, Obama said the government will provide financing to GM for 60 days while it comes up with a better restructuring plan.

Chrysler, on the other hand, must form a partnership with the Italian automaker Fiat within 30 days to get another federal dime. The automaker said Monday it was negotiating a new alliance “framework” with Fiat after claiming earlier in the day it had sealed a deal.

Obama said his plan was drafted after consulting officials in Canada and Mexico, adding that the Canadian government has “indicated its support for our approach.”

In Ottawa, Industry Minister Tony Clement said GM and the Canadian Auto Workers union would have to reopen their recent concession-filled agreement and find even more cost-cutting measures. The union rejected that idea.

“Going forward, the industry will undoubtedly be smaller, but if our efforts are successful it will be viable and it will support good jobs for Canadians,” Clement said.

“What has become apparent over the last few months is that this is not just a temporary blip in the marketplace. There is some fundamental restructuring that must take place.”

The fresh uncertainty surrounding the North American auto sector sent stocks tumbling on the heels of a spring rally that has seen equities surging for much of March.

General Motors employs 12,000 people in Canada while Chrysler employs 9,400. But tens of thousands of additional jobs are tied to the success of the two companies through the parts sector, suppliers and dealerships.

Obama said neither Chrysler nor GM had shown any real progress in overhauling its operations that would justify receiving the billions more in federal bailout funds..

Ford Motor Co., the third member of the Detroit Big Three, hasn’t requested federal bailout funds.

Just Posted

Protect your pets from ticks, says Sylvan Lake vet

The number of ticks in Alberta has increased, and has put people and pets in danger of Lyme disease

Innisfail Eagles win Senior AAA provincial semifinal, earn final spot in Allan Cup

For the first time in their 71-year history, the Innisfail Eagles will… Continue reading

Ford says social media allows politicians to circumvent mainstream journalists

OTTAWA — Premier Doug Ford says mainstream journalists have become irrelevant because… Continue reading

Montreal priest stabbed during mass leaves hospital; suspect to be charged

MONTREAL — A Catholic priest who was stabbed as he was celebrating… Continue reading

The endless war against invasive species

Group looks to protect native ecological environments in Alberta

WATCH: Fashion show highlights Cree designers

The fashion show was part of a Samson Cree Nation conference on MMIW

Pricey Titanic wreck tours hope to bring new life to a century-old story

ST. JOHN’S, N.L. — Adventure tourists with money in the bank have… Continue reading

France investigates after older protester is injured in Nice

NICE, France — French authorities are investigating the case of an older… Continue reading

DOJ: Trump campaign did not co-ordinate with Russia in 2016

WASHINGTON — The Justice Department said Sunday that special counsel Robert Mueller’s… Continue reading

New report details impact of proposed NS spaceport in event of explosion or fire

HALIFAX — The head of a company proposing to open Canada’s only… Continue reading

Rothmans, Benson & Hedges gets creditor protection in $15B Quebec lawsuit

MONTREAL — Rothmans, Benson & Hedges has become the third tobacco company… Continue reading

Monster Energy drink recalled due to possible glass fragments

OTTAWA — Monster Energy Canada Ltd. is recalling one of its drinks… Continue reading

Global ocean group to study possible toxic splashdowns of space debris

A global agency that sets rules for the seas is studying the… Continue reading

Online real estate auctions try to shake up sales with novel approach

An online auction for a luxury home in Abbotsford, B.C., is drawing… Continue reading

Most Read