Automakers seek billions in loans from Canada

By John McCrank

TORONTO (Reuters) - Detroit's Big Three auto companies appealed the Canadian and Ontario governments for emergency loans on Friday against a backdrop of fresh layoffs at Ontario assembly plants.

General Motors Corp, Ford Motor Co and Chrysler LLC are seeking billions of dollars from Ottawa to help them survive a severe, industry-wide downturn.

Executives were also in Washington on Friday asking for $34 billion in U.S. government loans and credit lines for the industry, which has been badly battered by the U.S. economic downturn.

No official dollar figure has been attached to any Canadian aid package, but Ford said it is asking for a C$2 billion ($1.6 billion) line of credit, while media reports said GM and Chrysler are looking for bridge loans of C$2.4 billion and C$1.6 billion respectively.

The Canadian Press and the Globe and Mail said GM is also seeking an immediate C$800 to resolve its liquidity issues.

Reid Bigland, president and chief executive of Chrysler Canada said his company is seeking a proportionate amount to the $7 billion it is asking for in the United States.

About 20 percent of Chrysler's sales come from Canada, where it manufactures 20 to 25 percent of its vehicles.

Bigland said Canada would see upward of 500,000 direct and indirect job losses if the Detroit Three were to fail. He said that was a real possibility if the companies cannot secure the U.S. funding.

"We're fighting for our survival," he said.

Industry Minister Tony Clement said on Thursday that no decision had been made yet on whether to support the industry, an economic linchpin of the industrial heartland in Ontario and Quebec.

Clement made the comment at the opening of a new Toyota Canada plant in Woodstock, Ontario, built with financial support from both the federal and provincial governments.

The new Toyota plant will provide 1,200 jobs -- the same number that GM plans to lay off at its Oshawa, Ontario, car plant by early February.

"As of February 9, 1,200 of our car plant members are going to be jobless, not to mention the ripple effect on our auto parts sector," said Chris Buckley, president of Local 222 of the Canadian Auto Workers union in Oshawa.

GM said late Thursday it would lay off 700 people in February on top of the 500 layoffs announced two weeks ago.

Another 2,600 workers will lose their jobs when GM shutters its truck plant in Oshawa in May.