TORONTO — Ontario’s auto sector will keep shrinking and more jobs will disappear, even if there’s a bailout for struggling automakers, Premier Dalton McGuinty warned Wednesday.
And if one or more of the Big Three automakers collapses, the province has no Plan B, he acknowledged.
“Not even going to think about that,” he said. “What we’re going to do is work as hard as we can to make something good come out of this.”
The province’s economic development minister is in Detroit with federal Industry Minister Tony Clement to meet with auto executives and gather more information about how dire the situation is and what government aid may be offered, McGuinty said.
The premier wouldn’t say how many auto jobs he expects will disappear as the economic downturn and credit crisis continue to hammer General Motors, Ford and Chrysler.
“I think there’s something else we need to grab hold of here: I think we’re going to end up with a smaller auto sector in the province of Ontario,” he said.
“I think we’re going to end up with fewer jobs than we have at present in the province of Ontario, even if we work as well as we possibly can to put together some sort of support package.
“I mean, that’s just how the economy is working at present.”
Ontario, the heartland of the Canada’s auto industry, would be hardest hit province if one of the Big Three automakers filed for bankruptcy.
It would be a devastating blow to the province, which is already facing a $500-million deficit and will become a have-not province next year when it begins to collect equalization payments from Ottawa.
The collapse of one of the automakers is a prospect too horrible to contemplate, which is why the United States and Canadian governments can’t allow it to happen, said Ontario NDP Leader Howard Hampton.
“It would destroy so much of the American economy, and it would be almost impossible to resurrect it afterwards,” he said.
“I think we need to get real. The United States can’t afford to simply let its auto sector disappear.”
But any aid to the sector must be attached to job and product guarantees, Hampton added.
The Ontario Liberals have handed out millions of dollars to auto companies over the last four years without securing those assurances, he said.
As a result, Ontario is producing “gas-guzzling dinosaurs” instead of cutting-edge vehicles that consumers want to buy, he said.
“They don’t have a Plan B, just as they didn’t have a Plan A,” Hampton said.
McGuinty said he will be speaking this week to the Canadian Auto Workers union, which has indicated that it’s not willing to make concessions in return for a government bailout.
On Thursday, Clement and Bryant will be in Washington to gather more information about a possible U.S. government bailout package for the sector.
A rescue package that would speed US$25 billion to ailing automakers appears to have stalled in Washington.
Clement has said he would like to pursue a joint Canada-U.S. agreement to help the industry. But Bryant says Canada should go at it alone if the U.S. government doesn’t provide emergency funds before president-elect Barack Obama takes office in January.