Honda Cars : Chrysler threatens to pull out of Canada | 2013 New Honda Car Reviews 0

Updated: Wed Mar. 11 2009 10:50:07 PM
ctvtoronto.ca

Chrysler LLC says it may no longer be able to operate in Canada unless Ottawa loans the company billions of dollars and workers agree to massive wage cuts.

Chrysler president and vice chairman Tom LaSorda told MPs Wednesday the company is seeking US$2.3 billion from the Canadian government -- roughly a quarter of what it's asking from the White House.

He also said Canada's tax agency must agree to not demand more cash or collateral in a tax fight with the company. The Canada Revenue Agency is withholding $300 million in tax rebated and has put a $500-million lien on Chrysler's Brampton plant.

"The current success and long-term viability of Chrysler's manufacturing operations in Canada is very much dependent on (those) three critical factors," he told a committee hearing.

"Chrysler LLC cannot afford to manufacture products in a jurisdiction that in uncompetitive relative to other automotive jurisdictions."

New Democrat MP Joe Coartin, a member of the parliamentary committee that heard LaSorda's comments, dismissed them as little more than posturing.

"The bottom line is that Chrysler does not function in the United States without Canada," he said.

Chrysler Canada and its parent company, Chrysler LLC, have had their sales hammered by the economic downturn. Its sales were down 27 per cent in February compared to last year and it has asked Ottawa for a $1 billion in emergency loans as it works on its restructuring plan.

LaSorda said his company's labour costs are $70 an hour in wages and benefits for both current workers and retirees. He says it needs to be cut by $20 to be competitive.

Just last week, Chrysler announced it would be cutting 1,200 jobs in Windsor, Ont., by eliminating the third shift at its minivan assembly plant.

The Windsor plant produces the Chrysler Town & Country and Dodge Grand Caravan minivans and has about 4,450 hourly workers. It is the company's only supplier on minivans as two other minivan plants have been shut down in the U.S.

LaSorda said that the company could move the Windsor plant to either of the other sites they previously shut down.

The Dodge Grand Caravan was Canada's No. 3 best selling vehicle in February.

Analysts say Chrysler is teetering on the edge of bankruptcy. On top of the most recent job cut announcements, it has slashed about 32,000 jobs to staunch the financial bleeding, and has cut production levels by 30 per cent.

With a report by CTV's Graham Richardson in Ottawa




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