On Thursday,
Chrysler announced that it was shutting down for a month, putting 2,000 Brampton employees out of job just before Christmas.
The Friday before that,
GM's Oshawa plant cut its third shift, laying off 700 workers.
But Saturday, the Premier and the Prime Minister announced a bailout package to help the struggling auto sector, motivated by a similar action in the United States.
Stephen Harper and Dalton McGuinty revealed that the two governments combined will give $4 billion to the industry, including General Motors and Chrysler. Ford has opted out.
Less than half of that will come from the province - $1.3 billion - with the rest being made up by the federal coffers. That means Ottawa will cough up $2.7 billion.
But it's not a gift and there are strings attached.
"Today's announcement is not a blank cheque," Harper noted.
But, he added, "I will not fool you. There is obviously money at risk here. And there may be well more money at risk as we go forward."
Harper also announced that automotive suppliers would get a hand-up, and consumers would have an easier time getting credit to buy cars.
"Here in Ontario, we've got 400,000 people and their families who rely on the auto industry so they can put food onto table and keep a roof over their heads," McGuinty outlined at a press conference.
"This money will only flow after companies agree to meet conditions set by government. Those conditions include limits on executive compensation. Furthermore, the loans will only stay in place beyond March 31, 2009 if our governments are satisfied there are solid restructuring plans in place and underway," described Harper.
Last week, the federal and provincial governments vowed to match one-fifth of whatever the White House doled out. That turned out to be $17.4 billion in aid for the US sector. Twenty percent of that would have meant $4.2 billion (CDN).
"We're moving in unison with our American neighbours," added McGuinty.
Unions are warning that their employees may have to make some concessions to save their jobs, including pay cuts.
Harper also cautioned that if the governments didn't bail out the car manufacturers, the economic downfall wouldn't just hit the auto sector.
"We will not allow either a catastrophic failure that would go right across the system, and people need to understand this, if one or more of these big car companies failed overnight, you will not just have the closure of those assembly plants., you will have this spread very quickly to the supply chain."
Here's how much each company is getting, and when the cash is going to arrive.
General Motors
December 29, 2008: $0.8 billion
January 30, 2009: $1.2 billion
February 27, 2009: $1 billion
Chrysler
December 29, 2008: $0.4 billion
January 30, 2009: $0.4 billion
February 27, 2009: $0.2 billion
Here's what they have to do to keep the money flowing.
Conditions
- Amounts owing to automotive parts supplies to be paid according to reasonable automotive sector commercial terms and conditions including timing
- Borrowers must accept limits on executive compensation, including performance pay
- Borrowers must provide fully-authorized warrants for non-voting stock
- Borrowers must report material transactions (any business or other financial transaction with an associated value in excess of $125 million)
- Weekly reports to be provided on cash and liquidity positions, production and revenues as well as rolling thrice-monthly projections
- Federal and Ontario government officials or their duly-appointed contractors or agents shall have unimpeded access to the borrower's records