You are here
Home > Business > Motown giant sings the blues

Motown giant sings the blues

Thursday, December 11, 2008

By: Judy McNeil

General Motors slams on the brakes by slashing jobs in Canada and the U.S. as news of its economic woes deepens.

The company said 3,600 workers will be laid off including 500 at the Oshawa plant early next year.

In a Toronto Star report, GM’s Oshawa spokesperson Stew Low said the layoff is a reflection of the “poor U.S. economy.” The company is reeling from a $2.5-billion third quarter loss.

With the Canadian economy slowing down and the federal government warning of a budget deficit for the next fiscal year, Ottawa is reluctant to open its coffers to support a US-style bail-out.

Federal Finance Minister, Jim Flaherty, said, on CTV, that a lot of people are saying, “don’t use taxpayer’s money to help an enterprise that’s not doing well.”

Meanwhile, Oshawa’s mayor, John Gray, is alarmed at Ottawa’s reluctance to help and said that loan guarantees should be made available to automotive companies. “If the government doesn’t offer some kind of assistance, they are being very short-sighted and failure to help would result in a huge number of unemployed people,” said Gray.

“The housing crisis in the U.S. knocked the demand for trucks and as a result, Oshawa lost truck production and 2,500 jobs will disappear; then the oil price drove consumers away from big vehicles and now the credit crunch. All three things have really hit the automotive manufacturers very hard,” Gray commented.

He added that GM has invested significantly in Oshawa and that GM procures about $19 billion worth of goods and services in Ontario every year.

Ontario Premier Dalton McGuinty will be meeting with senior executives from the auto companies to find out what their needs are so that he can represent their concerns in Ottawa in a bid to secure a bail-out package.

GM dealers are facing the effects of the company’s sliding fortunes. Ray Sultana, general manager of Addison Chevrolet said that sale is quite brisk because prices have been lowered and consumers are taking advantage of the low prices.

“We’ve never sold new cars at these prices – ever, in our history and right now you can buy a new car now for the price of a used car,” said Sultana.

At Yonge Steeles Ford Lincoln, general sales manager Paul Carlucci said that with GM’s financial woes, more people are buying Ford. He said, “Our November 2008 sales have already topped the same period last year.”

Leave a Reply