Canada studies GM aid plan, welcomes CAW talks
OTTAWA (Reuters) - General Motors of Canada's bid for government aid is being closely reviewed after auditors for the U.S. parent said they doubted the company's ability to survive outside bankruptcy, Canadian officials said on Thursday.
The government said it also welcomed news that the Canadian Auto Workers union will begin exploratory discussions with GM Canada to find cost savings that will help the company qualify for government loans from Canada and the United States.
GM Canada, which is eligible for loans of up to C$3 billion ($2.3 billion) under a Canadian aid package, submitted a detailed proposal to Ottawa last month.
In Detroit, parent General Motors Corp said on Thursday its auditors had raised "substantial doubt" about its ability to survive outside of bankruptcy if it fails to stem its losses and stop burning through cash.
"Of course it's a concern," Canadian Finance Minister Jim Flaherty told a news conference in Washington after meeting with White House economic aide Larry Summers on the issue of aid to the auto sector. "It's a serious situation. That's why we've created a major stimulus package in the Canadian economy. This is not business as usual."
Flaherty later told the Canadian Broadcasting Corp the auto companies have to demonstrate "that they're going to survive over time because, after all, the governments have to be accountable to their taxpayers for the use of their money."
Industry Minister Tony Clement, who also met with Summers, said the auditors' warning demonstrated the need for Canada to review GM's plans "very closely and make sure they make sense from a Canadian perspective".
Ottawa is working closely with the U.S. government on how to help the auto sector, which is tightly integrated in the two countries.
UNION, COMPANY TALKS PLANNED Continued...