Failure of Big 3 affects Canada

The Straits Times
Nov 19, 2008 | 7:59 AM
Failure of Big 3 affects Canada

OTTAWA - THE failure of the Big Three US automakers would 'devastate' the Canadian economy, the head of the Canadian Auto Workers (CAW) union said on Tuesday, urging Ottawa and Washington to come to their aid.

Their insolvency would be a 'devastating blow to the economy, a devastating blow to consumers out there and quite frankly devastating to our members,' CAW president Ken Lewenza told broadcaster CTV.

His remarks came as the chief executives of Ford, Chrysler and General Motors pleaded with the US Congress for a US$25 billion (S$38.1 billion) rescue package.

Mr Ottawa was asked for help too, but remains uncommitted.

Industry Minister Tony Clement told public broadcaster CBC he is still 'information gathering' and is 'not in a position to say whether there's anything feasible that can be done from the Canadian perspective.'

A decision may take 'weeks or months,' he added, saying he eventually planned to go to Detroit and Washington on a fact-finding mission.

The Big Three employ 40,000 Canadians at its assembly plants in Ontario province, and are responsible for an estimated 300,000 indirect jobs in this country, including parts suppliers.

Almost 90 percent of vehicles assembled in Canada are exported to the United States, while 65 per cent of Canadian-made automotive parts head south.

Statistics Canada said exports of Ford, Chrysler and GM vehicles and parts peaked at US$41.4 billion in 1999, before falling by almost one-third since then.

The auto industry as a whole now accounts for about three percent of Canada's gross domestic product, said Mr Jim Stanford, CAW chief economist.

'It's not even imaginable what would happen in communities like Oshawa, Windsor, St. Catharines, Oakville' in southern Ontario, if the Big Three do not bounce back, commented Mr Lewenza.

'These communities are dominated by the auto industry.' -- AFP