Canada ready to give Chrysler short-term aid: report

Mon Mar 30, 2009 10:03am EDT
 
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TORONTO (Reuters) - Ottawa is prepared to provide immediate short-term bridge financing to Chrysler to keep its Canadian operations running, the Globe and Mail newspaper said on Monday, citing an unnamed government source.

The Canadian divisions of Chrysler and General Motors are seeking up to C$10 billion ($8 billion) in loans from Ottawa and the province of Ontario.

The companies have already received $17.4 billion in U.S. government loans and are seeking as much as $22 billion more.

The Globe and Mail said the Canadian and Ontario governments would have to provide Chrysler with emergency financing within two days to help keep the company operating if the U.S. government extends the deadline for the automakers' restructuring plans.

The U.S. government is set to make an announcement at 11 a.m. (1500 GMT) on Monday regarding its plans for the auto sector. The Canadian government is also set to make an announcement, at noon on Monday, on the industry.

Chrysler has about 9,400 workers in Canada, about 8,000 of whom are represented by the Canadian Auto Workers union.

GM and Chrysler have until March 31 to present long-term viability plans to governments in both the United States and Canada to qualify for long-term funding.

Ottawa and Ontario offered the Canadian arms of Chrysler and GM short-term financing back in December and the offer still stands, the Globe quoted the source, a senior government official, as saying.

There was no mention of whether GM Canada would also get short-term financing.   Continued...

 
<p>Workers load newly manufactured Chrysler 300's and Magnums onto trucks at the DaimlerChrysler Assembly plant in Brampton, February 14, 2007. REUTERS/J.P. Moczulski</p>