Government wants to help GM build new car in Oshawa

Wed Jun 4, 2008 5:22pm EDT
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OTTAWA (Reuters) - The Canadian government is interested in subsidizing the production of a new car at the General Motors of Canada auto assembly plant in Oshawa, Ontario, Finance Minister Jim Flaherty said on Wednesday.

He said he was willing to use the government's C$250 million ($245 million) Automotive Innovation Fund, designed to develop more fuel-efficient vehicles, to help start production of a third car at the plant.

"We need a third vehicle. I've already spoken with General Motors about that. We're going to stay on that as the federal government, and if we can participate in funding that innovation, then we're certainly going to be there," Flaherty told reporters.

"We want the auto sector to be a viable, sustainable sector in Canada. To do that, it has to be technologically innovative."

Flaherty said the key was to work with the company and the Canadian Auto Workers to see what was necessary.

The minister faced criticism in Parliament on Wednesday for GM's decision on Tuesday to close its truck plant in Oshawa.

($1=$1.02 Canadian)

(Reporting by Randall Palmer; Editing by Frank McGurty)