GM Canada says will not shut more plants under plan
TORONTO (Reuters) - The Canadian unit of General Motors Corp GM.N> would not have to close any more plants at this time under a restructuring plan delivered on Friday to the Canadian and Ontario governments as it seeks billions of dollars in additional assistance to survive.
The GM Canada plan, released on the company's website, also did not specify any additional job cuts, but it called for reductions to wages and benefits for employees. The plan would also keep 17 to 20 percent of GM's production in Canada over the next five years, the company said.
While GM Canada refrained from providing a dollar amount in terms of the Canadian aid it would require, its request is expected to be proportional to its auto production in Canada as a percentage of the U.S.-Canada total. Canadian Industry Minister Tony Clement later said GM is asking for C$6 billion ($4.8 billion) to C$7 billion in repayable loans.
The parent company has sought up to $30 billion in aid from the U.S. government, GM Canada said.
Chrysler Canada also a submitted a restructuring plan to the governments on Friday. Clement said Chrysler is asking for about C$1 billion.
The companies are reeling from the brutal downturn in the highly integrated North American auto sector and are seeking repayable loans to help them survive.
GM and Chrysler have already received a combined $17.4 billion from the U.S. Treasury, and on Tuesday they asked for nearly $22 billion more in emergency funding. That amount could increase to about $30 billion if the auto market further deteriorates. Ford Motor Co says it is in better shape and will not likely need to ask for immediate assistance.
The U.S. market has been hit especially hard, with auto sales dropping to a 27-year low in January. Around nine out of every 10 cars built in Canada are sold in the United States.
The Canadian market had looked more resilient up until November, but sales declines have since been sharp.
(Reporting by Wojtek Dabrowski; editing by Peter Galloway)
© Thomson Reuters 2017 All rights reserved.