Category: Canada

By Edward Niedermeyer on May 13, 2009

Pop quiz: how many XL7s has Suzuki built at its CAMI plant this year? Answer: four. Seriously. Compare that with the 5,687 built in Q1 2008, and it’s pretty clear that there’s something rotten in the province of Ontario. Especially when you consider that GM is still using its CAMI capacity to pump out 2009-model Chevy Equinox and Pontiac Torrent CUVs. According to the Financial Post, Suzuki will not be be building any more vehicles in North America in 2009. Which means ’09-built XL7s are set to become one of the rarest vehicles in the world. But the firm is committed to its CAMI plant, with CEO Osamu Suzuki telling the FP that “the possibility that CAMI would be forced into closure or a production stop is 120% impossible. It is a central pillar in the reconstruction plan, so I am not worried about it.” Which means CAMI should survive any GM bankruptcy. Suzuki may be sitting out the NA market in 2009 (while nursing its Indian market profits) but when it brings its CAMI capacity back online, it will likely be in support of its ambitious Kizashi mid-sized effort. Too bad, then, that the fanboys are already calling BS on Suzuki’s pledge to bring the Concept 3’s bold styling to the streets with the Kizashi.

By Samir Syed on May 11, 2009

Here’s a story that proves that incompetence and general apathy isn’t limited to the DMV where Patty & Selma Bouvier earn their living. Starting now, Quebec motorists can offer up $51.97 above the current cost of a driver’s license to obtain what the provincial government is calling “Smart” driver’s licenses. These licenses will come equipped with an RFID chip that can be scanned remotely by US border guards to identify approaching drivers. Introduced by Quebec’s version of a DMV, the SAAQ, these chipped IDs are meant to allow Quebecers to comply with new Department of Homeland Security regulations that require government-issued identification when entering the US by land. Here’s the problem: The (highly personal) information emitted by the RFID can also be read by anyone else who, with $250 and a working knowledge of eBay, can obtain the necessary equipment. To make matters worse, no encryption or security measures were implemented on these “Smart” licenses. Needless to say, it’s an identity thief’s wet dream.

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By Robert Farago on April 23, 2009

The Globe and Mail reports that the Canadian government is negotiating (with whom?) to provide $6 billion in post-bankruptcy financing to Chrysler and GM. It gets worse/better. The six bil represents a fixed percentage of a larger post-bankruptcy fund, currently under construction over at the US Treasury. That would be 15 percent. Which puts the size of the US fund at $40 billion. A pittance, apparently. “The companies had initially proposed that governments lend or guarantee a staggering $125 billion in bridge or long-term loans, but the number was whittled down over months of difficult negotiations led largely by Treasury officials in Washington. In recent weeks, sources said, talks shifted to a plan for the governments to provide financing and guarantees for debtor-in-possession, or DIP, loans. These are used for day-to-day operations while companies restructure their debt under the protection of court supervision.”

By Robert Farago on March 31, 2009

Mega dittos from our neighbors to the north. The Globe and Mail reports that the Canadian government is also playing hard man re: GM and Chrysler’s call on federal bailout bucks. Yada, yada, yada, restructure, union concessions, new plans, bankruptcy. And then, this:

Chrysler was unable to meet its Canadian payroll today without a $250-million advance on a $1-billion bridge loan from Canadian taxpayers. To qualify for up to $4-billion in long-term aid, Chrysler has to conclude now-stalled negotiations with the CAW on a cost-savings contract and complete the Fiat deal.

To stave off an immediate crisis, the federal and Ontario governments offered the bridge loans—including up to $3-billion for GM—to allow them to continue operating while they work to satisfy U.S. and Canadian government demands.

(Read More…)

By Edward Niedermeyer on March 13, 2009

As a condition of its government-funded restructuring, GM was supposed to wrangle concessions from its unions and bondholders. So far, the General has struck out with the major bondholder committee and the UAW, and has only had its agreement with the Canadian Auto Workers to crow about. But now that agreement appears to be in peril, as Reuters reports that Chrysler and Ford are rejecting the terms of the GM CAW restructuring. “The current agreement with GM is unacceptable and we have to break the pattern,” Chrysler’s Robert Nardelli told Canada’s House of Commons. “We believe the recently negotiated agreement between General Motors Canada and the Canadian Auto Workers will not keep Ford’s Canadian operations competitive in today’s global economy,” concurs Ford Manufacturing Maven Joe Hinrichs. While GM claims that its CAW deal brings labor costs in Canada in line with US transplants, Nardelli claims “the union agreement with GM, if applied to Chrysler, would not eliminate even half the labor cost gap Chrysler Canada has with its Asian competitors in Canada.”

By Robert Farago on March 12, 2009

Followers of the Motown meltdown may have detected a strong whiff of mafioso about the whole enterprise. Did I say enterprise? That sounds a bit too industrious, even though the automakers have been working hard to turn $7 million worth of your hard-earned taxes into about $35 billion in additional bailout bucks. On the other hand, we have the term “criminal enterprise.” As in you pay me my money or I’m gonna hurt you. If you still don’t pay, I’m gonna NSFWing kill you. (Organized crime may be organized but it’s not terribly clever.) To wit [via Automotive News]:

Chrysler LLC said today it may close its plants in Canada unless it gets sufficient labor concessions as well as government aid and resolution of a tax dispute.

In case you were thinking the recent CAW agreement with GM shows the way out of that particular part of ChyrCo’s Mexican standoff (also a NAFTA member!),  Co-Prez “Tommy Gun” LaSorda’s got news for you, after the jump.

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By Edward Niedermeyer on March 10, 2009

Ford gets props from anti-bailout folks for being the only Detroit automaker to not seek TARP bailout loans. But as several stories today indicate, Detroit’s putative last man standing is still seeking government sugar, if only in less direct ways than its hapless competitors. Automotive News [sub] reports that Ford is requesting the German government to extend its cash-for-clunker rebate, threatening temporary plant shutdowns if the handout sunsets at the pre-arranged 600K unit mark. “The bonus is smart, simple, and it works,” says Ford sales poobah Ingvar Sviggum. “Here is my appeal to the German government: The bonus is good for the auto industry, the country and for the consumer. So please stay with it. If the scrapping premium is not extended, there will be a dramatic decline in demand in the second half of the year as a result.” Just over 200K of the rebates have been claimed, leaving about 400K still to be claimed in the measure’s original run. But, y’ know, extend it anyway. Or else.

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By Robert Farago on March 10, 2009

Best. Headline. Ever. But then Canada’s Globe and Mail threw out their word mincing machine sometime around the turn of the last century. The paper shows its stones by revealing that the new deal between Generous Motors and the Canadian Auto Workers isn’t what you’d call onerous. Not by a long chalk.

The extra holidays remain intact in the new, cheaper version of GM Canada’s deal with the CAW, negotiated over the weekend. So does the child care subsidy (up to $2,400 per kid per year) and the car purchase discount (up to $2,600), which GM Canada – despite being on the brink of crisis – generously extended last spring to some 30,000 retired workers. Of course, current GM workers who think their jobs might vanish will want to hold off on buying that new GMC Sierra, to take advantage of the $35,000 vehicle voucher they would receive as part of their $100,000 restructuring allowance.

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By Edward Niedermeyer on March 3, 2009

While California breaks away from the national emissions standards, Canada is headed in the opposite direction towards unified efficiency regulations. “At this point in the United States, it would appear that they are headed towards a 35-mile-per-gallon standard by 2020 and that would start to come into effect in the 2011 model year,” says Canadian Environment Minister Jim Prentice. “We’ve essentially been prepared to go in that same direction . . . what we’re striving for is a North American standard because we know there’s only one North American automobile industry.” Prentice is in Washington DC discussing energy and environmental policy with the Obama administration. “The first thing that has to happen, however, is that the United States has to land with their own domestic policy,” Prentice tells Automotive News [sub]. “It’s by no means clear how this will emerge from Congress over the course of the next year.” Or whether California will play along. From an industry perspective, consistent regulations from the US to Canada would be welcome, although average fleet economy is not a favored regulatory metric.

By Edward Niedermeyer on February 19, 2009

Reuters reports that Chrysler Canada has been charged with a $500m CD ($400m USD) tax lien as a result of a tax liability reassesment. According to the document filed in Canadian federal court, the Canada Revenue Agency notified Chrysler Canada in 2002 that it owed “substantial increases” in taxes “targeting the pricing of automobiles and parts that crossed the border between Chrysler Canada and its Detroit parent” for three years starting in 1996. The document does not reveal the amount that Chrysler owes the Canadian government, but the $500m CD lien was filed against Chrysler’s Brampton, Ontario, operations. The lien is though to be the largest ever filed by the Canadian government, and likely represents an even larger tax liability than the lien amount. Chrysler is seeking shelter from the assesment in the Canada-US Tax Treaty, and according to reports, the court dispute has been shelved while the various governments negotiate a bailout for the auto sector. Needless to say, another half-billion in liabilities doesn’t exactly do wonders for Chrysler’s viability.

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