To Survive Credit Crisis, Canadian Car-Parts Industry Asks For $1 Billion Short-Term Loan

October 28, 2008 12:33 p.m. EST

Toronto, Ontario (AHN) - Up to $1 billion dollar loan will be needed by the Canadian car-parts industry for it to survive the global credit crunch, Gerry Fedchun, president of the Automotive Parts Manufacturers Association of Canada, told federal and provincial officials as he sought short-term loans for the industry.

Fedchun wrote to federal Finance Minister Jim Flaherty and Ontario Finance Minister Dwight Duncan, quoted by Globe and Mail, "Assistance is required immediately if our country has any hope of salvaging a once-vibrant and prosperous industry that is experiencing a temporary but very serious financial crisis."

Bill Rodgers, communications director of federal Industry Minister Jim Prentice said similar requests have been received by Prentice from the forest industry. He added other segments of the vehicle sector are reeling from the economic slowdown and would benefit from inclusion in the $250 million automotive innovation fund promised by politicians during the last election.

The Canadian Vehicle Manufacturers Association supports Fedchun's request for government assistance.

Various subsidiaries in Canada of American car makers have scaled down their operations in Toronto following the decline in demand for new vehicles. General Motors earlier announced a plan to close a metal stamping facility in Michigan and advance the shut down of a sports utility vehicle production plant in Wisconsin by the end of 2008.

GM disclosed in June it would shutter the Wisconsin plant, together with three other plants in North America, including a pick-up truck facility in Oshawa, Ontario by 2010. There is no announcement yet from GM if the planned closures similarly be advanced for its Ontario facility.