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Canada Seeks Hundreds of Millions Back From Automakers
4 Feb
Summary
- Canada aims to recover hundreds of millions of dollars from automakers.
- Stellantis and GM scaled back production, triggering repayment demands.
- Automaker production share in Canada has significantly declined.
Canada is pursuing the recovery of "hundreds of millions of dollars" from Stellantis and General Motors due to scaled-back production in the country. Industry Minister Melanie Joly indicated that government support was contingent on production levels, necessitating repayment when output is reduced.
These actions follow Stellantis shifting Jeep Compass production from Brampton, Ontario, and GM canceling a third shift at its Oshawa, Ontario, facility and halting electric van production in Ingersoll, Ontario. The government previously provided significant funding for these plants, which was tied to maintaining operations.
Automaker share of Canadian auto production has dropped significantly, from 56% in 2016 to 23% last year, with Honda and Toyota now dominating the sector. Experts are skeptical about the government's ability to recover the funds due to the structure of the financial agreements. Meanwhile, Canada is exploring new investments from Hyundai, Volkswagen, and Chinese automakers to bolster its auto industry.
