By JAMES DAWSONPublished December 06, 2017 07:21:00The Canadian auto industry is on the verge of being shut down by bankruptcy proceedings.
The Canadian National Automobile Association said Monday that the industry’s parent company, General Motors Canada Ltd., will file for Chapter 11 protection as early as December.GM has been under pressure for months to release documents it has been withholding, and to release more information about the bankruptcy proceedings and how it will pay its creditors.
The group is now on the brink of a bankruptcy filing, after the company said on Friday it would pay $4.5 billion in back wages and benefits, but that it had yet to identify any lenders.
The auto industry’s chief executive, Brian Burke, said in January that the group had been unable to secure any lenders for GM and would not be able to do so without raising the company’s debt.GM said on Monday that it has a plan in place to pay its employees and retirees through an investment fund and has agreed to pay $100 million to cover the cost of legal expenses and court costs, but will need to raise more money to pay out those payments.”GM is committed to providing a safe and stable environment for its employees, their families and their communities,” GM said in a statement.
“GM is working to protect the interests of its employees through our investments in its pension plans and the company continues to work with government to help protect workers and their families.”GM, a subsidiary of the General Motors Corporation, is one of the world’s largest automakers.
GM, which also has a major stake in Ford Motor Co., has been at the center of a political controversy over alleged labour abuses in the auto industry.
A judge on Friday ordered GM to turn over more documents and meet with a group of federal and provincial labour inspectors and labour experts to examine GM’s safety record.
The court order also prevents GM from disclosing the names of its creditors, including the Canadian Automobile Workers Union, until December 1.GM’s bankruptcy filing came as a shock to the auto sector, which had been expecting to be able start repaying the debt in the first quarter.
GM is one, and not the only, of the three largest auto makers to file for bankruptcy.
Ford Motor, Ford Motor Canada and GM Canada were all part of the American International Group.
The Canadian Association of Chiefs of Police also called for GM to release the documents, saying the company had “mischaracterized the circumstances” in the past.
“This is just the latest chapter in the ongoing unraveling of the Canadian auto sector,” said Chris Simpson, a spokesman for the CACP.
“This is a sad time for the workers of the country and the citizens of Canada, who have been left in the lurch and will be looking to GM to pay back the debt.”
We’re concerned about the safety and well-being of all the workers and the communities we serve.”GM is one in a string of large companies in the U.S. and Canada to file bankruptcy.
GM Canada has already filed for bankruptcy, and Ford Motor in May filed for protection, along with General Motors, Toyota Motor Corp., Hyundai Motor Co. and the Canadian Tire Group.