Ottawa wants to help GM build new car in Oshawa

This is from the National Post.
Well it will not be Ottawa but the Canadian taxpayer that will help GM build a new car in Oshawa. This is the same GM that signs a contract agreeing not to close a plant and then announces its closure a couple of weeks later. Of course even though it is taxpayer money that will provide the aid, the taxpayer will have no right to know the terms of the agreement since that will be a commercial secret, same as the loan (formerly grant!) of the Ontario government.
The union members are showing some spunk in blockading the GM headquarters and it certainly makes sense to keep it up until at least the meeting on Friday between union leaders and GM officials.

Wednesday, June 04, 2008
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Ottawa wants to help GM build new car in Oshawa
James Cowan and Nicolas Van Praet, National Post with files from Canwest News Service and Reuters Published: Wednesday, June 04, 2008
Tyler Anderson/National Post
Hundreds of angry autoworkers kept up their protest against the closure of General Motors of Canada Ltd.'s Oshawa, Ont., truck plant Thursday, a day after the federal government said it was interested in subsidizing the production of a new car at a separate GM facility nearby.
Finance Minister Jim Flaherty said he was willing to use the government's $250-million Automotive Innovation Fund, designed to develop more fuel-efficient vehicles, to help start production of a third car at GM's Oshawa car plant. The factory's largest product by volume currently is the Chevrolet Impala.
GM will start building a remake of its rear-wheel drive Chevrolet Camaro muscle car at the Oshawa car plant later this year and has also agreed during recent contract negotiations with the Canadian Auto Workers union on an additional third model based on the same rear-wheel drive platform.
"We need a third vehicle. I've already spoken with General Motors about that. We're going to stay on that as the federal government, and if we can participate in funding that innovation, then we're certainly going to be there," Mr. Flaherty told reporters in Ottawa Wednesday.
"We want the auto sector to be a viable, sustainable sector in Canada. To do that, it has to be technologically innovative."
GM this week also confirmed it is weighing a fourth model for the Oshawa car plant. It said it would be a front-wheel drive model. That would make more in tune with GM's new push towards smaller and fuel efficient vehicles amid a sudden collapse in demand for pickup trucks and SUVs.
Asked if that fourth product mandate for Oshawa was conditional on government assistance, Arturo Elias, GM Canada president said the federal and provincial governments are aware that GM is looking at a fourth car. "It would be very premature at this time to speculate on timing and other things related to that. ... product."
The CAW said GM leaked plans of that fourth car to divert attention from the fact it was shutting down the truck plant.
In Toronto, the Ontario government scrambled Wednesday to clarify the terms of its $175-million interest-free loan to the carmaker.
GM said on Tuesday it would close its truck plant next year, a move that would force the layoff of 2,600 workers. The announcement caused a political headache for Ontario's Liberal government, which provided the company with a 50-year loan in 2005 aimed at bolstering the flagging automotive sector.
Opposition parties alleged the government failed to disclose the funds were a loan, not a grant. Critics also accused Sandra Pupatello, the Minister of Economic Development and Trade, of giving conflicting answers on the loan's length and the job guarantees contained within the agreement.
"They didn't know the boundaries of their own agreement," Jerry Oullette, Oshawa's Conservative MPP, said in an interview. "First they said it was a grant, then it was a loan. First it was for 30 years, then it was for 50 years. ... And nobody seems to know how it was tied to jobs."
The government cannot disclose "commercially sensitive" information, Dalton McGuinty, the Premier, said. GM has admitted it will likely face close to $35-million in penalties on the loan for failing to meet agreed-upon employment targets. Under the arrangement, GM needed to maintain the equivalent of 16,000 jobs in Ontario over a 10-year period. No penalty will likely be levied until the plant closes next October and it is possible that the company could minimize the cost by hiking production at the Oshawa plant in the months leading up to the closure, sources familiar with the deal said.
While defending the government's need to remain closed-lipped about the deal's specifics, Mr. McGuinty admitted the government could have better communicated that the arrangement was a loan, not a grant. "We should have made that information available earlier," Mr. McGuinty said. "In fact, I think the loan puts us in a better light than what was categorized as a give away. There is a real cost to it ... but I think we could have managed that better."
GM announced the closure of the Oshawa plant as part of a major strategtic shift toward cars and crossover-utility vehicles as soaring gasoline prices kills demand for pickup trucks and SUVs. The company will also halt production at two plants in the United States and one in Mexico.
Members of the Canadian Auto Workers set up a blockade along the road leading to the GM headquarters early Wednesday morning to protest what they call a blatant betrayal of a contract settlement reached two weeks ago. The blockade continued Thursday.
GM announced it would meet with the senior union leaders on Friday in Detroit.
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