General Motors and Chrysler promised to trim jobs, overhaul their products and keep Canadian manufacturing plants open in return for billions in emergency government loans.
General Motors Canada, which is asking for about $7.5 billion from the federal and provincial governments, said it will maintain proportional Canadian production levels compared to the U.S. and won't close any plants in Canada.
But the auto maker plans to trim its Canadian workforce down to 7,000 employees by 2010. In 2005, GM Canada employed 20,000 people.
Meanwhile, Chrysler sent Canadian officials the same document it submitted to U.S. lawmakers earlier in the week, with the addition of a covering letter.
Chrysler's Canadian pitch didn't include specifics and was panned as deficient by politicians and industry analysts. Still, part of Chrysler's plan to return to profitability includes an alliance with Italian automaker Fiat and the introduction an electric-drive vehicle by 2010.
And the company said that Canadian employees will have to make further concessions to bring wages in line with their U.S. counterparts.
Industry Minister Tony Clement said he was "encouraged" by General Motors' restructuring plans.
"This is not a grant ... we expect the money to come back in commercial terms," Clement said Friday, only hours after GM submitted its turnaround strategy to Ottawa.
"We still need to have the opportunity to review their plans in detail ... but I have to say that this is a good first step," Clement said.
Part of GM's plan includes a commitment to launch a new facility in Oshawa, Ont., to build a new hybrid model.
GM also wants the government's help to provide "sufficient financing to sustain operations and restructure GM Canada's balance sheet to address unsustainable legacy costs."
It "contemplates no further GM Canada plant closures at this time, reflecting restructuring actions already announced," the company said in a news release. It didn't say how many jobs would be maintained.
Executives' salaries would be cut by 10 per cent. White-collar workers would see cuts to their salaries and benefits.
The plans don't specify an actual amount, but indicate GM's request will be proportional to the US$30-billion request GM made to the U.S. government. That would put the Canadian request at about US$6 billion or Cdn$7.52 billion.
"They did not provide a number," Michael Bryant, Ontario's economic development minister, told a news conference, adding the figure "would not be negotiated through the media."
He expected negotiations would continue "right to the wire" on March 31.
GM said it plans to launch five new vehicles at its plants in Oshawa and Ingersoll, Ont. This would include new hybrid vehicle production.
A "leaner and greener" GM will result from the restructuring, the company said.
Clement said that Chrysler needs to submit more detailed plans if it expects to receive any government loans. The company had previously asked for a bailout loan worth about $1 billion.
And industry analyst Dennis DesRosiers said Chrysler's plan was "quite disappointing."
"It's really unfortunate because Canada has a much higher exposure to Chrysler than General Motors. Over 25 per cent of Chrysler is in Canada versus 17 per cent of General Motors, and Chrysler's the most vulnerable of the two," DesRosiers said.
Ford isn't currently seeking financial assistance from government. Neither are the Japanese auto manufacturers operating in Ontario.
Auto workers nervous
Auto workers have been nervous that the restructuring plans will include layoffs or plant closures.
Earlier in the week the two companies' U.S. operations submitted their restructuring blueprints, which included 50,000 layoffs and several plant closures in order to justify federal bailout funding.
Ken Lewenza, head of the Canadian Auto Workers, pledged Friday evening that the union "will be part of the solution," but he stressed that GM must maintain its current proportions of manufacturing in Canada.
"Number one, the manufacturing footprint has to be there," he said.
But Lewenza said that potential union concessions regarding so-called legacy costs are unacceptable.
"I just want to say that pensions must be protected," said Lewenza. "The GM plan was under-funded even when it was profitable."
McGuinty's limits
Ontario's Premier Dalton McGuinty indicated earlier he has a limit as to how much public money his government will spend on propping up the Big Three in the province's troubled auto sector.
"Is there a figure that is too high? Absolutely. What it is, I don't know," McGuinty told reporters in Toronto on Friday.
"We will do everything that we can, but we've got to be responsible ... We're absolutely committed to this, but if GM were to come forward with some astonishing figure that didn't lend us the necessary security, then obviously we'd be looking at it in a different light."
The companies' willingness to protect Canadian jobs is another factor, he said.
With files from The Canadian Press
