Chrysler Bankrupt - Gets $3bn from Canadian Governments

[August1991]

U.S. and Canadian governments will provide about $15-billion (U.S.) in financing to Chrysler LLC to help keep it operating through bankruptcy protection, sources said Thursday.

The federal and Ontario governments will provide about $3-billion, the sources said, which will cover debtor-in-possession financing and exit financing when the beleaguered auto maker emerges from Chapter 11 bankruptcy protection. The governments will hold a 10-per-cent stake in Chrysler, with the Canadian governments' stake sitting at 2 per cent.

Chrysler is expected to file for bankruptcy protection on Friday.

G&M

This is going to hurt the Tories.

This high profile bail out will rightly be seen as a payoff to Ontario. As a result, the Tories will lose the Quebec seats they hold now in the Beauce and Quebec City area and they will lose support in western Canada. In Ontario, this will be perceived as too little too late.

Whatever share the federal government has in the $3 billion, this bail out is simply too high profile and outside of Ontario, it will be seen as throwing good money after bad. In Canada, our federal politics are always seen through the prism of regions. The optics of this decision are awful.

Harper's only hope is to throw some more money (ugh) at forestry workers and a plane maintenance contract to Manitoba, or something.

[Moonbox]

G&M

This is going to hurt the Tories.

This high profile bail out will rightly be seen as a payoff to Ontario. As a result, the Tories will lose the Quebec seats they hold now in the Beauce and Quebec City area and they will lose support in western Canada. In Ontario, this will be perceived as too little too late.

Whatever share the federal government has in the $3 billion, this bail out is simply too high profile and outside of Ontario, it will be seen as throwing good money after bad. In Canada, our federal politics are always seen through the prism of regions. The optics of this decision are awful.

Harper's only hope is to throw some more money (ugh) at forestry workers and a plane maintenance contract to Manitoba, or something.

A 3 billion 'payoff' to Ontario, by far the country's most important economy, is hardly going to lose the Tories the west. Quebec is lost already so who cares?

If you're going to look for votes, it might as well be in Ontario where 1/3 of Canadians live.

[M.Dancer]

Good money chasing bad....

A better investment would be getting Subaru or Hyundai to open a plant here...buiding cars that canadians want....What a concept!!!

[Smallc]

Chrysler is Canada's best selling brand.

[jdobbin]

This high profile bail out will rightly be seen as a payoff to Ontario. As a result, the Tories will lose the Quebec seats they hold now in the Beauce and Quebec City area and they will lose support in western Canada. In Ontario, this will be perceived as too little too late.

Given that liquidation would probably cost Canada even more in terms of money and job losses, do you really think Harper wants to be seen to side with the hedge funds and be named by Obama for the collapse of the company?

[Muddy]

We reward failure in this country! Shame on Harper and Obama. No business should get loans,prefered tax incentives. Anytime the government does it makes an uneven playing field for competition. I am furious that government even considers bailing out any business and especially when failed CEO`s get bunuses with our tax dollars. SHAME on all who promoted these bail outs.

[M.Dancer]

Chrysler is Canada's best selling brand.

They certainly are...right after Toyota, Mazda and Honda....

The Top 10 Best-selling cars in Canada

From January 1 to December 31, 2007

Rank / Model (Last year's position) / Total sales

1- Honda Civic (1) 70,838

2- Mazda3 (2) 48,236

3- Toyota Corolla (3) 40,474

4- Toyota Yaris (4) 34,424

5- Chevrolet Cobalt (5) 32,613

6- Toyota Camry (6) 28,218

7- Pontiac G5 (8) 25,211

8- Ford Focus (7) 24,013

9- Honda Accord (--) 22,102

10- Nissan Versa (--) 21,940

http://en.autos.sympatico.msn.ca/guides_an...umentid=6198519

[sharkman]

Without knowing the specifics as there have been many rumours, I think the bankruptcy can be a good thing if it frees Chrysler from the high union wages/benefits they've been paying, although I'm unsure as to how much they would save when reworking said contracts with the unions(Or is that process already complete?). What they really need to do is revamp their line up.

But as to the political ramifications, I gave up guessing what Quebec would do many years ago. August seems to have his finger on the pulse, however, so it doesn't exactly sound good.

Edited April 30, 2009 by sharkman

[Smallc]

I said brand. Those are models.

[Muddy]

I said brand. Those are models.

Well the best selling brands all end in vowels. That should tell us something.

[Smallc]

Well the best selling brands all end in vowels. That should tell us something.

None of them do in fact.

[M.Dancer]

I said brand. Those are models.

Chrysler is a brand and not a very high selling one either. Maybe you mean the chysler family which includes Dodge and jeep....in any case, they are still not number 1...that honour goes to....

GM

[Smallc]

Still can't find the right article. This one is by company and not brand...actually it seems I'm lying since it's in fact Dodge...which has a vowel at the end...that is the best selling.

http://www.forbes.com/feeds/afx/2009/01/05/afx5881645.html

Edited April 30, 2009 by Smallc

[Smallc]

I did mean Dodge, but GM isn't a brand either, it's a company.

[Muddy]

None of them do in fact.

What! aeiou and sometimes y.

[Smallc]

Anyway, I think it was in January, and Dodge, Chevrolet, and Ford were all within a few hundred units of each other and Dodge was in the lead. They have always been in the top three for sales...in recent times anyway.

[M.Dancer]

I did mean Dodge, but GM isn't a brand either, it's a company.

And you are still wrong...the GM family sells more units than the Chrysler family...

Toyota sells more than Chrysler..

[bush_cheney2004]

I did mean Dodge, but GM isn't a brand either, it's a company.

If it were 1927, you might be right. The Dodge Brothers sold a lot of cars and trucks back then....before Walter left Buick to start Chrysler and the Dodge widows sold off the company.

Point being that there has been a lot more consolidation of automobile manufacturers in the past, no reason to expect that to change.

Dodge trucks are still chasing Poncho Villa on the Mexican border.

[Smallc]

And you are still wrong...the GM family sells more units than the Chrysler family...

Toyota sells more than Chrysler..

Toyota doesn't sell more than Chrysler in Canada...and recently, Dodge has sold more vehicles than Chevrolet.

[Smallc]

If it were 1927, you might be right.

In 2009, Dodge sold more vehicles than Chevrolet in the last month that I heard numbers for...too bad i can't find the article.

[bush_cheney2004]

In 2009, Dodge sold more vehicles than Chevrolet in the last month that I heard numbers for...too bad i can't find the article.

The best selling automobile vehicle model in Canada for April was the Dodge Grand Caravan at 3775 units, but this is only a small portion of total Chrysler sales (second to GM).

[M.Dancer]

In 2009, Dodge sold more vehicles than Chevrolet in the last month that I heard numbers for...too bad i can't find the article.

Still wrong...

Chrysler and Ford supplanted traditional leader General Motors last month as the top sellers of light vehicles in Canada, an automotive sector analyst said Tuesday.

Dennis DesRosiers said Chrysler sold 11,923 units last month, while Ford sold 11,854 units. That topped the 11,381 cars and light trucks sold by GM.

http://www.cbc.ca/money/story/2009/03/03/carsales.html

[Smallc]

The best selling automobile vehicle model in Canada for April was the Dodge Grand Caravan at 3775 units, but this is only a small portion of total Chrysler sales (second to GM).

Yes, the Chrysler company is second to GM, but the Dodge brand is just above or just below the Chevrolet brand. I didn't mean to say Chrysler in the beginning, I meant to say Dodge. It's also important to note that Chrysler LLC has more Canadian workers tha GM Canada.

[ToadBrother]

We reward failure in this country! Shame on Harper and Obama. No business should get loans,prefered tax incentives. Anytime the government does it makes an uneven playing field for competition. I am furious that government even considers bailing out any business and especially when failed CEO`s get bunuses with our tax dollars. SHAME on all who promoted these bail outs.

This is where concrete, unwavering ideology gets countries into huge messes. Yes, as a normal course of action, I agree, but if there's one thing we learned from the Depression, doing too little too late is well, doing too little too late. Put your ideology under your pillow for a year or two, because otherwise, this really really bad recession would turn into a nightmarish depression.

[Smallc]

Still wrong...

http://www.cbc.ca/money/story/2009/03/03/carsales.html

Ok, so it was light vehicles. I was wrong on the overall numbers...(I can't believe that GM sells that many medium duty vehicles...that's nothing short of amazing), but since light vehicles are what consumers buy, my overall point is still relevant. Canadians have not in any way shunned Chrysler.