Canada offers $3.29 billion to auto bailout

Last update: December 20, 2008 - 11:44 PM

CANADA OFFERS $3.29 BILLION TO AUTO BAILOUT

Canada's federal and Ontario governments will provide the Canadian subsidiaries of the Detroit Three automakers with $3.29 billion in emergency loans, officials said Saturday.

Prime Minister Stephen Harper said Canada's bailout plan, the equivalent of 20 percent of the U.S. aid package, will help to keep the plants afloat while the automakers restructure their businesses.

Canada's automotive industry, which represents 14 percent of the country's manufacturing output and 23 percent of manufactured exports, directly employs more than 150,000 Canadians. It's the country's largest industry within the manufacturing sector.

The Canadian plan will provide General Motors Canada with loans of up to $2.47 billion and Chrysler Canada will receive up to $823 million. The companies will get the money in three installments, with the first coming Dec. 29.

Similar to the U.S. bailout, the Canadian aid package comes with strings attached, including a request that parts suppliers get the money they are owed, that borrowers accept limits on executive compensation and that they provide the government with warrants for nonvoting stock.

ASSOCIATED PRESS