Canadian Opposition Questions $235 Million GM Aid

Ontario, Canada (AHN) - The Monday announcement by General Motors of plans to close its transmission facility in Windsor by 2010 triggered the opposition to take a second look at the $235 million received by GM from provincial coffers.

The amount was supposed to boost the U.S. car manufacturer's Ontario facility. Ontario Premier Dalton McGuinty admitted to the Toronto Star, "At first blush, it's counterintuitive, but I would encourage folks to look beyond the headlines."

McGuinty pointed out the strings linked with the $235 million assistance to GM, almost half of Ontario's $500 million auto investment fund, are tied up only with specific investments or joint undertakings, not a guarantee by GM that it will remain forever in Ontario.

The fund was launched in 2004. At that time, McGuinty pointed to the auto fund for boosting the production capacity of GM in North America.

With the impending plant closure two years from now which would lead to the loss of 3,000 jobs, questions from the opposition are starting to rise over the wisdom of plunking so much taxpayers' money on the car fund and GM in particular.

New Democratic Party Leader Howard Hampton told the Toronto Star, "The Premier may think handing General Motors $250 million and then General Motors laying off 3,000 workers is a good deal... I don't think people in Windsor think it's a good deal. If you're going to give money to large, international corporations, there have to be some job guarantees, and the McGuinty government clearly has failed."

McGuinty admitted GM did not use the $325 million fund to expand it's Windsor capacity.

GM's forthcoming closure would push the number of jobless auto workers to 4,000 spread over two years. Aside from GM, auto workers from Ford Motor, Lear Corporation and Chrysler Canada have also reduced their work force due to weak demand for new vehicle across Canada.