The Canadian government should follow the lead of the U.S. when it comes to aid for the Big Three automakers. That’s the opinion of the 136 Canadian business leaders recently surveyed by COMPAS Inc.
A multi-billion dollar bailout package for the automakers failed to pass through the U.S. Senate on Thursday, though the White House has indicated it is considering allocating some of the US$700 billion available under the Troubled Asset Relief Program to the automakers. The Canadian government, meanwhile, said on Friday it is examining aid to auto parts companies, but is unlikely to do the same for automakers without a U.S. deal.
Nearly 90% of the CEOs surveyed said the Canadian government should definitely wait for the U.S. to act first. “Canada alone cannot save the North American Big 3,” according to one respondent. “It can only augment the efforts of the U.S.”
Should the U.S. deliver a plan with enough funding to keep the Big Three going for another two to three months, most of the respondents believe the Canadian government should deliver a similar level of support. Slightly more than half said the amount of support should be the same, whereas 10% said the Canadian government should actually extend more support to automakers than in the U.S.
Those notions didn’t sit well with the 35% of CEOs who said automakers should get nothing from government. “The taxpayer must not be asked to bankroll business interests that cannot raise funds in the private sector on their own merit,” wrote one respondent.
Other CEOs highlighted to need to put conditions on any rescue package. “The Canadian government should only provide assistance to the auto companies if the employment stays in Canada. Following the American lead is pointless if the jobs go south of the border,” according to one.
“The unions must grant concessions in wages, as well as work rules. This is the opportunity to bring them back to reality. They are a major cause of the problems,” wrote another CEO.
The automakers themselves didn’t escape blame either: “Any aid to the automakers should be based on plans to improve quality and efficiency, or we will be revisiting the problem again in a number of months.”