December 5, 2008 / 10:12 PM / in 9 years

Automakers appeal to Ottawa as layoffs mount

TORONTO (Reuters) - The Big Three North American auto companies took their case for emergency aid to the Canadian government on Friday against a backdrop of fresh layoffs at the country’s assembly plants.

<p>Ford Motor Company of Canada head office, pictured, is situated beside it's Oakville Assembly Plant in Oakville, a Toronto suburb, February 15, 2006. REUTERS/J.P. Moczulski</p>

General Motors Corp, Ford Motor Co and Chrysler LLC are seeking billions of dollars from Ottawa to help them survive a severe, industry-wide downturn.

Executives were also in Washington on Friday asking for $34 billion in U.S. government loans and credit lines for the industry, which has been badly battered by the U.S. economic downturn.

No dollar figure has been attached to any Canadian aid package, but Reid Bigland, president and chief executive of Chrysler Canada said his company is seeking a proportionate amount to the $7 billion it is asking for in the United States.

About 20 percent of Chrysler’s sales come from Canada, where it manufactures 20 to 25 percent of its vehicles.

Bigland said Canada would see upward of 500,000 direct and indirect job losses if the Detroit Three were to fail. He said that was a real possibility if the companies cannot secure the U.S. funding.

Canadian Industry Minister Tony Clement said on Thursday that no decision had been made yet on whether to support the industry, an economic linchpin of the industrial heartland in Ontario and Quebec.

Clement made the comment at the opening of a new Toyota Canada plant in Woodstock, Ontario, built with financial support from both the federal and provincial governments.

The new Toyota plant will provide 1,200 jobs -- the same number that GM plans to lay off at its Oshawa, Ontario, car plant by early February.

“As of February 9, 1,200 of our car plant members are going to be jobless, not to mention the ripple effect on our auto parts sector,” said Chris Buckley, president of Local 222 of the Canadian Auto Workers union in Oshawa.

GM said late Thursday it would lay off 700 people in February on top of the 500 layoffs announced two weeks ago.

Another 2,600 workers will lose their jobs when GM shutters its truck plant in Oshawa in May.

Buckley said the union plans to meet with GM to see what it can do to help stem the losses and ensure laid-off workers receive adequate compensation.

“We’re going to do the responsible thing as a union in order to secure the future of our members the best we can in the worst time in our history,” he said.

CAW President Ken Lewenza said the union was not against making concessions to help save the companies money, but he took a tough stance on wages and benefits.

“We will be part of the debate, and in doing that we will try to convince as many people as we possibly can that the challenges that we have in the auto industry are not a result of our wages and benefits and the conditions in which we work,” he said.

Lewenza pointed to the collective bargaining agreements the CAW made with the Detroit Three in the spring. He said the union saved the companies about C$900 million through freezes to wages, pensions and cost-of-living allowances, as well as through reduced vacation time, by taking on more health care costs, and other measures.

Representatives from the Detroit Three were not immediately available for comment.

($1=$1.28 Canadian)

Reporting by John McCrank; editing by Rob Wilson

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