21 Feb 2009

Canadian restructuring plans due from GM, Chrysler

9:32 am on 21 February 2009

General Motors and Chrysler are likely to cut more jobs as part of their proposals to secure Canadian government aid, but neither is likely shut more plants, says Ontario Premier Dalton McGuinty.

The companies are reeling from the severe downturn in the North American auto sector and are seeking repayable loans to help them survive.

The governments of Canada and the province of Ontario pledged $C4 billion in support to the industry in late December, but that figure is expected to at least double, based on what the companies are asking for in the United States.

GM and Chrysler have already received a combined $US17.4 billion from the US Treasury, and on Tuesday they asked for nearly $22 billion more in emergency funding.

Ford Motor Co says it is in better shape and is not likely to need to ask for immediate assistance.

The US market has been hit especially hard, with vehicle sales dropping to a 27-year low in January.

About nine out of every 10 cars built in Canada are sold in the United States.

GM shares hit 70-year low

General Motors shares hit their lowest point in more than 70 years on Friday as speculation continued to swirl about the future of the struggling automaker.

The Detroit-based company's shares fell to $US1.57 in Friday afternoon trading on Wall Street.

That matches a low set on 31 March, 1938, according to the Center for Research in Security Prices at the University of Chicago. The price is adjusted for splits and other changes.

Shares of the vehicle manufacturer have tumbled in recent weeks, falling from $US3.50 a month ago.