Car trouble

Canadian automakers are suffering record deficits

News of GM and Chrysler restructuring has sent the Canadian auto industry into a tailspin, again. Our auto trade deficit (the value of vehicle and parts imports minus exports) has more than doubled since last year to $13.8 billion, a record low. (A decade ago, Canada enjoyed a surplus of $14.3 billion.) For the first time ever, when you combine the U.S. and Mexico markets, supply of Canadian-made vehicles has outstripped demand. Trade to Asia and Europe is hardly better. If the automakers negotiate a loan agreement with Washington, it could mean plant closures and major job losses in Canada—on top of the thousands of layoffs that have already happened over the last year, especially in southern Ontario. Later this week, GM and Chrysler Canada will court provincial and federal governments for $4 billion in aid. No matter, car analyst Dennis DesRosier says “ultimately it will end up in blood on the factory floor here.”

Toronto Star