I am not a no-government-intervention sort of conservative, and generally support a reasonable amount of government regulation and other minimal/judicial intervention in the economy. However, for the life of me I cannot see the benefit of doling out billions to Chrysler Canada Inc.
Any money we give Chrysler Canada, including loans, will be lost. Chrysler was in deep trouble long before the current recession hit. Way back in early 2007, Daimler-Chrysler, the former parent company tried to unload the Chrysler portion of their operations.
Obviously Daimler saw that Chrysler was not likely to turn the corner as they did the last time they had to be rescued by the United States government with USD $1.5 billion in loan guarantees to avoid bankruptcy.
Daimler knew that this time, there was not then and is not now a Lee Iacocca sitting in the wings ready to lead a rescue and return the company to profitability. And so Daimler sold off some 80% of it holdings in Chrysler. Then, in Oct. 2008, Daimler announced that its stake (about 20%) in Chrysler had a book value of zero dollars after write offs and charges.
Chrysler reported losses of USD $1.5 billion in 2006. It then began to lay off thousands employees from 2007 on. None of this has turned their operations around.
Chrysler is a goner. Prime Minister Stephen Harper’s and Premier Dalton McGuinty’s governments should put the money aside to assist directly those families and individuals who are all going to lose their jobs rather than wasting it trying to save this company.
And as far as Chrysler’s recent attempt to blackmail our province and country—tell them to get stuffed!