April 13, 2009 / 6:34 PM / 9 years ago

Union says Canada automakers made billions till 2008

TORONTO (Reuters) - Canada’s auto industry made more than C$100 billion ($82 billion) in profits between 1972 and 2007, with the Canadian units of General Motors Corp (GM.N) and Chrysler generating more than a third of those earnings, a report by the Canadian Auto Workers union said on Monday.

<p>General Motors auto workers prepare rows of the new Chevrolet Camaro for delivery, at the company's Oshawa Ontario facility April 8, 2009. REUTERS/Fred Thornhill</p>

Jim Stanford, the union’s economist and author of the study, said the report is meant to underline the long-term importance of the now-struggling auto industry to Canada’s financial health.

The auto industry’s steep decline worldwide in the wake of the financial sector meltdown and credit crunch has put GM and Chrysler deep in the red. Both companies have applied for billions of dollars in U.S. and Canadian government loans to help them survive.

“Yes, we’re at a tough moment right now, but we shouldn’t forget that bigger picture, which has been one of consistent profit and tremendous opportunity,” Stanford told Reuters.

The report said automotive assembly and parts companies were the most profitable heavy industry in Canada between 1972 and 2007, pocketing C$101.29 billion after taxes.

The union said GM Canada made C$31.75 billion in profit in that period, while Chrysler Canada made C$4.95 billion.

Representatives from GM and Chrysler’s Canadian arms were not immediately available for comment on the report.

The numbers in the CAW report are based partly on industry-wide profitability data from Statistics Canada.

The report also uses limited data from the automakers. The Canadian arms of GM and Chrysler stopped reporting their results publicly in the late 1990s, and Stanford used estimates based on industry-wide trends.

All the data is adjusted for inflation and stated in 2008 constant dollars.

GM and Chrysler, which is controlled by Cerberus Capital Management LP CBS.UL, have been under pressure from governments in Canada and the United States to reduce costs related to both their active and retired workers.

Ottawa and Washington rejected restructuring plans put forward by the automakers at the end of March, saying they had to make bigger cuts to qualify for long-term government loans.

Ottawa did offer GM and Chrysler C$4 billion in bridge financing to help them survive in the short term.

The companies are seeking up to C$11.5 billion in total loans in Canada.

GM has been running on $13.4 billion in emergency U.S. government loans, and is seeking another $16.6 billion.

Ford Motor Co (F.N) has not asked for government loans.

($1=$1.22 Canadian)

Editing by Peter Galloway

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below