TORONTO – The federal and Ontario governments announced Saturday a bailout package of 4 billion Canadian dollars ($3.29 billion) for the Canadian subsidiaries of the Detroit Three automakers.
The announcement follows a pledge Friday by President George W. Bush to offer $17.4 billion in emergency loans to General Motors Corp. and Chrysler LLC.
Ontario Premier Dalton McGuinty says his province will provide 1.3 billion Canadian dollars ($1.07 billion), with the rest provided by Ottawa for a total of 4 billion Canadian dollars in renewable loans payable to the Canadian subsidiaries.
Prime Minister Stephen Harper, however, says that Saturday’s announcement “is not a blank check” for the industry, suggesting both the companies and their employers will have to make concessions.
The carmakers are suffering from their slowest sales in 26 years and dwindling operating cash.
Analysts on both sides of the border speculate the bailouts will become much more expensive over the years.