Government strikes deal with GM for Ontario investment

[neshapop]

http://news.yahoo.com/s/nm/20080906/...autos_gm_col_1

TORONTO (Reuters) - The Canadian government said on Saturday it had struck a deal with General Motors of Canada Ltd that commits the automaker to invest $290 million at several of its Ontario operations.

The announcement is the second of its kind in the past three days and may help shore up support for Canada's minority Conservative government in Southern Ontario, where the auto manufacturing sector has been bleeding jobs, on the eve of an election call.

Under the agreement, GM will put about $245 million into its St. Catharines plant to make fuel-efficient 6-speed front-wheel drive transmissions, which would support more than 300 jobs, Industry Canada said in a release.

In Oshawa, where GM recently announced it was shuttering its truck plant, eliminating 2,600 jobs, Canada's largest auto maker has agreed to build a mid-sized hybrid vehicle at its car plant.

GM will also commit $40 million for environmental research at its Canadian engineering center, also in Oshawa.

The Canadian government, which is widely expected to call a federal election on Sunday for October 14, is not required to contribute any new funds.

Instead, it said it would not trigger early repayment of loans it provided GM under a 2005 agreement, of around $200 million, that hinged on minimum employment targets, which GM will not meet due to the truck plant closure.

On Thursday, the government announced it would invest up to $80 million in Ford Canada facilities in Windsor, Ontario.

Canada's auto sector has been hit hard by a combination of high gasoline prices, a stronger Canadian dollar and the economic slowdown in the United States, where nine of every 10 Canadian-built cars are sold.

[zete]

I believe the Federal Government also forgave GM $200+M in loans, probably those for the original St. Therese F-Body plant.

[Ambalanche]

Originally Posted by neshapop

GM will also commit $40 million for environmental research at its Canadian engineering center, also in Oshawa.

Oh sure, there's plenty of extra money laying around for this! What would that have equated to, a MCE to the aging Impala's interior since it's going to be at least 4 more years before there's a new one?!!

[zete]

Originally Posted by Ambalanche

Oh sure, there's plenty of extra money laying around for this! What would that have equated to, a MCE to the aging Impala's interior since it's going to be at least 4 more years before there's a new one?!!

If I heard the news correctly, our government forgave GM more than $200M in outstanding loans from prior years. So this is a $40M investment from GM so they can be forgiven $200+M owing to the Canadian people. Seems like a deal if you ask me. Effectively revalues the outstanding loan at about 40 cents on the dollar!

[dindak]

The CAW has been whining for months so I guess they finally got something to shut them up. I'm sure Buzz will say it's still not enough.

[airbalancer]

Originally Posted by dindak

The CAW has been whining for months so I guess they finally got something to shut them up. I'm sure Buzz will say it's still not enough.

Buzz is gone
http://www.thestar.com/News/Canada/article/492082

[K Dawg ONE]

^^^OK fine:
I guess Ken Lewenza will still say its not enough.

But, Buzz did say the other day, when the FOMOCO money was announced, that it wasnt enough.

[K Dawg ONE]

Originally Posted by neshapop

In Oshawa, where GM recently announced it was shuttering its truck plant, eliminating 2,600 jobs, Canada's largest auto maker has agreed to build a mid-sized hybrid vehicle at its car plant.

Anyone wanna speculate??

[BlackSilverado]

We are getting more then a midsized hybrid

[bone]

Southern Ontario votes will determine whether the Conservatives win a majority in the House of Commons. I'm not sure the CAW will buy into this.

[cadsrbest]

Originally Posted by zete

If I heard the news correctly, our government forgave GM more than $200M in outstanding loans from prior years. So this is a $40M investment from GM so they can be forgiven $200+M owing to the Canadian people. Seems like a deal if you ask me. Effectively revalues the outstanding loan at about 40 cents on the dollar!

Actually that would be 20 cents on the dollar...hopefully this will work out well for both GM and Canadians!

[Smaart Aas Saabr]

Originally Posted by cadsrbest

Actually that would be 20 cents on the dollar...hopefully this will work out well for both GM and Canadians!

I dislike this "repayable loan" BS I'd be happy, ish, if it leads to more Conserveratives though

[johnriley]

Election imminent. The candy store is open. Time to buy our votes with our own money.

[fp115]

Look at this thread here...

http://www.gminsidenews.com/forums/f...da-deal-68911/