Canada ponies up $4B for autos

Canadian officials Monday said they would provide $4 billion in short-term loans to General Motors of Canada Ltd. and Chrysler LLC.

The action comes on the heels of an announcement by Chrysler that it had reached an agreement to ally itself with Fiat SpA and the forced resignation of GM Chairman and Chief Executive Officer Rick Wagoner.

The Canadian federal government and the government of Ontario said the financing agreement requires General Motors to win further pension and benefits reductions from the Canadian Auto Workers union, the Globe and Mail reported. Chrysler was directed to win further concessions from the CAW as well, the newspaper said.

U.S. President Barack Obama, saying the government would not allow the U.S. auto industry to vanish, gave General Motors Corp. and Chrysler LLC 60 days and 30 days, respectively, to make drastic changes or face bankruptcy. Canada imposed a similar timetable.

Canadian officials also are requiring restrictions on executive compensation.

Prime Minister Stephen Harper Sunday told Fox News providing some assistance to carmakers is necessary but accountability also is paramount.

If we’re going to put taxpayer money in this, we have to make sure it works, Harper told Fox News Sunday. And I think, given the scope and the size of this industry, we have no choice.