Canada Rejects GM, Chrysler Plans, Refuses to Provide Support
To be more specific, Canada says the restructuring plans do "not go far enough and will not be certified as viable in their current form", the Detroit News reported today quoting officials from the Canadian and Ontario governments.
In other words, General Motors and Chrysler won't receive the initial $3.2 billion (C$4 billion) in Canadian funds requested in December but the two companies will still receive a smaller amount of money to get through the crisis and buy more time for revising their plans.
According to the aforementioned source, Canada will support the two companies' short-term plans with the following packages: Chrysler will get $200 million (C$250 million) from the innitial $800 million (C$1 billion) package it requested while GM will also receive a small sum from the demanded $2.4 billion (C$3 billion) funding in early April.
Overall, the two companies plans to receive a funding package of up to $9.1 billion (C$11.5 billion) to support their long-term plans and continue operations in Canada.
The Canadian division of General Motors has been given a 60-day deadline to revise its survival plan and negotiate labor cost cuts with the Canadian Auto Workers. Chrysler has also received a 30-day window to link with Fiat and rethink its restructuring plans.