OTTAWA — Prime Minister Stephen Harper tickled the ivories to the tune of The Beatles Saturday night at the sold-out NAC Gala held at the National Arts Centre in support of Canada’s next generation of performing artists.

Harper got by with a little help from cellist Yo-Yo Ma taking to the stage just prior to the intermission to sing and play the piano. He performed a classic Beatles tune — With a Little Help from My Friends — accompanied by Ma, one of the greatest classical musicians of our time, and members of the Ottawa band, Herringbone.

Harper’s unexpected number earned him a standing ovation and loud cheers from the black-tie audience of 2,300 people.

At one point during the song, the crowd clapped along and, at times, chuckled aloud, as when Harper sang “What would you do if I sang out of tune,” which he did, and “I need somebody to love.”

Very few people in Southam Hall saw the Prime Minister’s performance coming, with the exception of his wife, who returned for her fourth year as chairwoman.

“I thought he was great,” she said at the VIP reception held during intermission. She admitted it had been a struggle for her to keep the secret to herself.

Others agreed. “I think it was a great move on his part,” commented provincial cabinet minister and Ottawa MPP Jim Watson, while pointing out that Harper was not wearing a black tie but an open-collar shirt. “Touche, Mr. Harper.”

Laureen Harper also made her own appearance on stage, just prior to the concert. She announced that this year’s gala had raised $575,000 for the National Youth and Education Trust, calling it “a shining example of how we can support the artistic development of young people across the country.”

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This is Labour Day week-end in Canada, so Monday is a national holiday.
A great time to relax and enjoy!
We began Friday evening with supper on the balcony of our high-rise building, ending with a glass of Strawberry wine.
Another beautiful sunset as daylight turned into nighttime.

The weather this week has been fabulous, and the week-end should continue sunny with high temps of about 72 degrees-no humidity!

Saturday morning (7:30 AM) greeted us with hundreds of hot-air balloons floating above, as the prevailing winds took participants at Gatineau Balloon Festival overhead.
With luck, and favourable winds, we look forward to seeing them again before Festival's end on Monday.

Sunday (Sept. 6/09) we plan to tour and picnic with the Pontiac, so check out my album for photos of that event!

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We are on vacation in eastern Canada-New Brunswick and Nova Scotia.
Eating lots of lobster,scallops,seafood chowder etc. Fresh from the fishing boat at the dock!

Saw a nice red 1966 Corvair for sale in Digby NS.

Enjoy the photo of Peggy's Cove!

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Electric cars will become part of the Ontario government's fleet and consumers will get up to $10,000 in rebates to buy one of the experimental vehicles.

But with a hefty price tag, the new electric-hybrid cars will be a hard sell.

General Motors Co.'s Chevrolet Volt is expected to hit the roads next year, but will cost as much as $40,000.

"Electric vehicles are the way to go in Ontario," Premier McGuinty said in a statement released Wednesday morning. "This plan helps get more people behind the wheel of a green vehicle to create jobs, reduce smog and equip Ontario for the 21st century."

Later, he told a news conference at a Toronto auto dealership that he wants electric cars to make up five per cent of all cars on the road by 2020.

In an effort to achieve that, he announced "rebates of between $4,000 and $10,000 for plug-in hybrid and battery electric vehicles purchased after July 1, 2010.

"They tell me that when they roll the first of these off the assembly line, they're going to be expensive, relative to the traditional car powered by the regular internal combustion engine," he said. "We want to help people buy those first cars."

The province will buy 500 of the new cars for government use.

When asked why the government is handing out taxpayer dollars to subsidize the new line of autos, he said the idea is to help build a market for the vehicles.

"At some point, the price comes down ... and you can take away the government initiative."

He said the subsidy, which doesn't begin for 12 months, will eventually be dropped. He just couldn't say when.

"It won't last forever."

Not all electric or hybrid cars will be covered by the announcement. The rebate is restricted to cars that can travel on highways.

That rules out the Zenn car, which was designed for urban use and has not been approved for Ontario's highways.

The government has cited safety concerns, even though two other provinces have approved the Zenn car for use on roads with speed limits below 50 km/h.

Analysts say the province is using the incentive as an attempt to boost its struggling auto sector and position itself at the forefront of the green technology.

The province also announced plans to expand recharging facilities and allow owners of the new cars to use carpool lanes.

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Okay, before we go any further let’s get a definition for what the heck a petrosexual is. The Internet-based Urban Dictionary offers a couple of definitions, but we’ll go with the one most likely to apply here: “A term used to describe a person who is obsessed with cars.”

Carmony.co.uk – an online used car seller – commissioned an independent survey, finding both sexes share similar car knowledge, love shopping in their car, and listen to the same music while at the wheel – Queen’s “Don’t stop me now” being the nation’s number one driving tune.

The study into British driving habits showed women are edging closer to men in the car knowledge stakes, with 57 percent saying they know the difference between a coupe and a hatchback, compared to almost two thirds of men. Very impressive.

Women are still more likely to name their cars, with almost one in five naming their ‘Fifi Fiesta’ or ‘Andy Audi’, compared to just 12 percent of men. Renaults are the most likely vehicle to have a human name – 20 percent but ‘Tommy Toyotas’ are rare – 12 percent..

While the typical trunk bursts with shopping purchases, the study found that muddy boots are most likely to be found in the trunk of a MINI (24 percent) and Volkswagen drivers are the fittest in the UK with a quarter (25 percent) filling the back with gym equipment and sportswear. However, MINI drivers are the least likely to workout (6 percent) making them bottom of the fitness fanatic poll.

Now this might be too much information!

Get this; Brits are underwear fanatics, with more than half opting for big and comfortable pants when driving. However, the study also found that women older than 45 (22 percent) and those that drive BMWs (27 percent) are the most likely to where sexy lingerie. One in 20 (5 percent) of male BMW drivers wear a thong and eight percent of older men are more likely to go commando!

Attention Audi drivers!

Almost one in ten think their vehicle choice makes them seem more intelligent and 12 percent of male Audi drivers believe their car makes them seem well endowed! However, the vast majority of drivers (70 percent) don’t think that their car says anything about them. How dull they are, that’s more like the Brit stereotype we all love.

Let’s close on a high note: Music is the number one driving companion and 1970s-era rockers Queen dominates the car audio systems for both sexes.

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By LAURA CZEKAJ, SUN MEDIA

Ottawa Ontario drivers will be the first in the world to test a locally developed gasoline containing biofuel derived from wheat straw.

For the next month, the Shell gas station on Merivale Rd.will offer customers a unique gasoline containing 10% cellulosic ethanol.

Unlike conventional ethanol, which is fermented from corn or sugar cane and has been accused of driving up food prices, Iogen's unique fuel uses non-food portions of the crops. The price of the fuel during the demonstration will be tied to regular gas prices, said Luis Scoffone, Shell's biofuels vice-president.

After the Ottawa pilot project, the plan is to look at selling the fuel at stations across North America.

However, Scoffone couldn't say exactly when that would happen. The price of the fuel could be more or less than conventional gasoline depending on the world market, he said.

A self-described fan of cellulosic ethanol, federal Transport Minister John Baird listed the product's benefits: It's locally developed and produced, and reduces greenhouse gas emissions.

The federal government committed $2 billion to support development of a Canadian renewable fuels industry in its 2007 budget.

There's an ample supply of resources to produce cellulosic ethanol, which could significantly reduce consumer dependence on petroleum, said Iogen CEO Brian Foody.

"In the U.S., they figure they can cut their petroleum use by 30%," he said

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Italian automaker Fiat today acquired most of the assets of Chrysler, which has been in bankruptcy protection since April.

Fiat CEO Sergio Marchionne became the boss of the new company, which said it will get idled Chrysler manufacturing plants open again soon. The plants have been down since Chrysler sought creditor protection.

"Work is already underway on developing new environmentally friendly, fuel-efficient, high-quality vehicles that we intend to become Chrysler's hallmark going forward," he said.

Fiat will initially hold a 20 per cent stake in Chrysler, which could eventually grow to 35 per cent on certain conditions being met. Fiat cannot acquire majority control of Chrysler until all public funds are repaid.

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The effort by the administration of President Barack Obama to hurry Chrysler through bankruptcy court ran into an unexpected last-minute delay, when the Supreme Court said it could consider whether to hear the objections of three Indiana state funds and consumer groups.

Judge Ruth Bader Ginsburg issued a one-sentence order that amounted to a holding action.

The delay could be resolved quickly, freeing Chrysler to join forces with Fiat. But if the court decides to hear an appeal that lasts weeks or months, it could put Chrysler at risk of going out of business. Fiat, the only company to show an interest in acquiring most of the assets of Chrysler, has the option to walk away from the deal if it is not concluded by next Monday, though the company said it would not do so.


Such a decision would also give the justices an early opportunity to consider the scope of the wide-ranging but not unlimited authority that Congress granted the president to address the economic crisis.

Indeed, the Indiana funds explicitly compared the Chrysler case with Youngstown Sheet and Tube v. Sawyer, the 1952 decision in which the Supreme Court rejected President Harry S. Truman’s assertion that he had the constitutional authority to seize steel mills during the Korean War.

“I think the points of law are so clear in this case that they need to be examined by this body,” said Richard Mourdock, the Indiana treasurer.

Some creditors dug in for a fight, including the three Indiana funds, which represent teachers and police officers and are seeking more compensation for their $42.5 million share of Chrysler’s $6.9 billion in secured debt.

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Opponents of Chrysler's sale to Fiat are asking the U.S. Supreme Court to block the deal.

Three Indiana state pension and construction funds filed emergency papers at the high court early Sunday to put the sale on hold so they can pursue an appeal.

The federal appeals court in New York approved the sale Friday but gave objectors until Monday afternoon to try to get the Supreme Court to intervene. Chrysler wants to sell the bulk of its assets to a group led by Italy's Fiat as part of its plan to emerge from bankruptcy protection.

The emergency request goes first to Justice Ruth Bader Ginsburg, who handles such matters from New York. She can act on her own or refer it to the entire court.

The Indiana State Police Pension Fund, the Indiana Teacher's Retirement Fund and the state's Major Moves Construction Fund maintain the deal unfairly favours the interests of the company's unsecured stakeholders ahead of those of secured debtholders such as themselves.

The funds also challenged the constitutionality of the U.S. Treasury Department's use of Troubled Asset Relief Program, or TARP, funds to supply Chrysler's bankruptcy protection financing. They say the Treasury did so without Congressional authority.

Michigan-based Chrysler has maintained that the sale must be completed quickly to save the automaker from complete collapse. If the deal doesn't close by June 15, Fiat has the option of pulling out.

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Fresh off his company's investment in Germany's Opel, Canadian auto parts magnate Frank Stronach was in Ottawa on Tuesday seeking federal funds to start building electric cars in Canada for sale within as little as three years.

"In 12 years, we see 30 per cent of all cars being electric. There will be very fierce competition in the world for that market, but I feel very strongly Magna will be among the leaders," Stronach, the chairman of Magna International, said at a news conference adjacent to Parliament Hill, where a Ford Focus battery electric car being developed in partnership with Magna was on display.

"One of the main reasons I'm here today ... is that I would like to see that the first electrical car facilities are in Canada. If we could get a loan, we know we could speed it up. If we could get a loan, we could make sure it's in Canada."

The first stage of that process would involve the production of lithium ion battery systems for electric cars. Stronach said the company has so far spent $200 million of the $300 million necessary to develop the project, although he refused to specify how much it is seeking from the Canadian government.

Stronach said Magna had paid $50 million for the rights to lithium-ion battery technology developed by a South Korean manufacturer, saying the auto parts maker couldn't wait the seven or eight years it would have taken to develop its own products.

Stronach said the company could begin mass-producing battery systems, and entire electric cars, within three years.

In April, Magna announced a major push into electric vehicles through a strategic alliance with Ford Motor Co. to supply key components for a battery-powered vehicle.

Stronach also said Tuesday that the terms of Magna's investment in German auto maker Opel from General Motors Corp. prevent it from selling Opel autos in the United States or China, although he expressed optimism that those terms could be revisited.

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General Motors Corp., reorganizing under U. S. bankruptcy protection with US$60-billion in public aid, outperformed the industry in Canadian sales last month with a 12% decline as rival Chrysler LLC saw its volumes plunge by half.

GM sold 31,546 vehicles nationwide, the most of any automaker, mirroring a solid performance in the United States where it tallied its best sales month this year. Canadian sales for all automakers combined fell 16.5%, the seventh straight monthly year-over-year decline.

Mercedes Benz AG and Mitsubishi Motors reported all-time sales records in Canada for the month. Honda Motor Corp. reported a 17% decline. Toyota Motor Corp.sold 25% fewer vehicles.

Chrysler blamed its 50% sales drop on its factories being idled during bankruptcy protection, which cut deliveries to car rental companies and other fleet customers who buy vehicles on a built-to-order basis. It said retail sales were up 6%. "Traffic at the dealerships has started humming again as Canadians realize we are here for the long haul," said Reid Bigland, Chrysler Canada's president.

In the United States, passenger vehicle sales were stronger than expected in May. GM is revamping to become profit after losing nearly US$90-billion over the past four years.

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A ruling on Tuesday by the judge overseeing the Chrysler bankruptcy case could fast-track the company’s efforts to sell its assets to the Italian carmaker Fiat and further expedite the emergence of a newer, healthier company.

The judge, Arthur J. Gonzalez, said that an appeal that sought to block the sale to Fiat could be heard directly by the United States Court of Appeals for the Second Circuit, a move that the American carmaker had wanted.

The appeal was filed by lawyers for a group of Indiana pension funds, which objected to the sale because they were seeking more compensation for the Chrysler secured debt they hold.

Lawyers for Chrysler and the government argued that the sale to Fiat needed to be completed as quickly as possible to preserve its viability as a company and to save thousands of jobs. Fiat can walk away if no agreement is struck by June 15, although that deadline can be pushed back by one month to allow for certain regulatory approvals.

Late Sunday night, Judge Gonzalez, approved the sale to Fiat, overruling more than 300 objections. On Monday night, he agreed to shorten a customary 10-day stay of the sale to four days, allowing Chrysler to complete the transaction by Friday at noon.

If the sale is closed before the appeals court makes a decision, objectors are likely to receive only damages for their claims if the court rules in their favor, rather than being able to unwind the transaction.

When Chrysler emerges from bankruptcy, it will have a new ownership structure, with a union retiree trust owning 55 percent, Fiat holding a 20 percent share that could eventually grow to 35 percent, and the United States and Canadian governments taking minority stakes.

The Indiana funds making the challenge, which include those representing state teachers and police officers, hold about $42.5 million of Chrysler’s $6.9 billion in first-lien debt, so called because it is first in line for repayment. But holders of about 92 percent of those loans agreed to a government plan whereby they would receive 29 cents on the dollar in cash for their claims.

The Indiana funds bought its holdings in July 2008 for 43 cents on the dollar.

Lawyers for these funds have questioned whether Chrysler could have realized a better deal than the Fiat transaction or through a liquidation. They have also raised objections to the sale on constitutional grounds, arguing that the Obama administration was not allowed to give bailout money earmarked for financial institutions to Chrysler.

In his order Sunday night, Judge Gonzalez disagreed with the notion that alternatives to the Fiat deal existed. He also said that holders of 92 percent of Chrysler’s secured debt had backed the plan.

In a separate order, Judge Gonzalez ruled that the pension funds lacked standing to challenge the administration on its use of federal bailout money.

Other objectors included several groups of Chrysler dealers, representing some of the 789 that would be cut as part of the Fiat sale. These groups argued that Fiat should be forced to accept more dealers, or that the deal should be delayed to give them more time to change Fiat’s decision.

A hearing on Chrysler’s motion to cut those dealers is scheduled for Wednesday morning.

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What’s cheaper than a fire sale? Answer: A government give-away.

After months of dead-end deal-making in the collapsing auto industry, acquirers are finally lining up to make a run at the assets being spun off from struggling United States automakers. The only hitch, according to bankers and analysts, is that they don’t expect to pay anything.

Instead, potential industrial partners for G.M. brands like Opel and Saab are being lured by the prospect of nearly risk-free financing brokered by governments from Washington to Berlin to Stockholm desperate to protect automotive jobs.

That makes distressed auto acquisitions far less risky.
On Thursday, the field of potential suitors for Opel was narrowed to two companies, Fiat, the Italian automaker, and Magna, a Canadian auto parts giant.

But the new model for automotive deal-making is the Fiat acquisition of Chrysler, bankers say.

In that transaction, Fiat gets management control of Chrysler and the prospect of a majority share over time without committing any cash to the deal financed by the U.S. Treasury.

“There is no capital changing hands in these transactions,” said a banker, who asked not to be named because of his involvement in confidential auto auctions.

Analysts say the list of Opel bidders also shows how the promise of government support has stoked ambitions for the industry’s also-rans to power themselves into the mainstream.

Under Chief Executive Sergio Marchionne, Fiat is aiming to catapult itself from the world’s eleventh largest auto manufacturer to the central player in an alliance that would be No. 2 behind only Toyota Motor Company.

Under a plan the automaker dubbed “Project Phoenix,” Fiat has also said it is interested in buying G.M. operations in Argentina, Uruguay and Paraguay and GM South Africa and its Saab unit, now operating in court protection in Sweden.

The projected price tag: 7 billion euros ($9.7 bln) in combined funding, much of which would have to come from government coffers.

Meanwhile, Magna, which supplies parts to vehicle manufacturers, has teamed up with Russian bank Sberbank Rossii and Russian automaker GAZ in a plan that would see an investment of up to 700 million euros in Opel.

G.M. is also running an independent auction for its Swedish brand Saab, which attracted 27 bidders before the automaker narrowed down the final bidders to three, according to the Swedish government.

Saab expects to pick a winning bidder by June or July. The Swedish government, eager to protect 3,400 remaining jobs at the G.M. unit, has offered $3.6 billion in support for the auto industry in Sweden.

One investment banker, who requested anonymity because of his involvement in confidential deals, told Reuters that the reason was the promise of government aid. “Let’s not fool ourselves. None of these buyers would be around if it weren’t for guarantees of government assistance and the promise of fire sales.”

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A beautiful Sunday, with plenty of sun and temperatures of about 71 degrees.
We took a trip in the Pontiac, lasting about 3 hours, including a stop for pie and coffee in Cardinal Ontario, a cute little town on the St. Lawrence River.
A short history follows.

Early natives camped beside the turbulent rapids here 400 to 500 years ago. French voyagers who rested by the rapids during expeditions gave them their original name, "Galloping Waters".
However, it was United Empire Loyalists who finally settled at the rapids' site, and that settlement became the village of Cardinal.

After the American Revolution, troops loyal to the King (United Empire Loyalists - U.E.L's), gathered in Lower Canada in an attempt to stage a counter revolution. Returning to Canada, it became apparent that something must be done to recompense the men who had given up so much for their loyalty to the King.

It was decided to survey the upper St. Lawrence Valley, with a view to settlement, while some of the Loyalists turned to the east and took up residence in Nova Scotia.

Hugh Munro, seeing the possibilities of water power inherent in the rapids, had by 1790, settled at Point Cardinal.

The "galloping rapids" at Cardinal were so treacherous that the boats had to be pushed upstream with poles. One of Cardinal's first settlers, Henry Lewis, established a very profitable business using yokes of oxen to pull boats through the swift waters. Some days he made as much as $20!

As river traffic increased plans were made to build a canal that would take boaters around the Galop Rapids. Construction, done without the benefit of machinery, began in 1844. Workers used carts, horses, picks, axes, wheel barrows and shovels, and were paid 50 cents a day. The canal cut through the outer edge of the village.

Soon a deeper waterway was needed and work began on a "new" canal in 1897.

Although this new canal was deeper, it was still not possible for ocean-going ships to pass through. The St. Lawrence Seaway was constructed and a causeway was built.

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As today is Victoria Day, a statutory holiday in Canada, we took advantage of the sun and 55 degree temperature to go for our first cruise of the season.
Hope you enjoy the photos.

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General Motors Corp. plans to drop one in six dealers in the United States as it reinvents itself as a smaller company through an anticipated bankruptcy-protection filing by the end of May.

The move could spark a political backlash as thousands of sales staff are laid off in communities across the country.
More than 13,000 jobs at Canadian dealers are also at risk.

The Detroit automaker, facing a June 1 deadline to snuff out $27 billion U.S. in bondholder debt and strike new labour agreements or be pushed into bankruptcy, said Friday it sent letters to 1,100 small-volume and underperforming dealers telling them their existing franchise agreements will be wound down by October 2010.
Another 500 GM dealers selling Saturn, Hummer and Saab vehicles may also be cut loose as the automaker sells or shuts down those brands.

Getting no mail from the automaker in this case meant salvation.

"It's like American Idol or Dancing with the Stars," said Richard Genthe, a third-generation Chevrolet dealer in Southgate, Michigan. "You're waiting to go onto the next week. And then you get word that you're safe."

Following more attrition and dealer consolidation, the company said that it expects to dwindle down its U.S. dealer network to 3,600 stores from the current 6,000 by the end of next year, a 40 per cent decrease.
GM's Canadian dealer web is expected to undergo a similar scaleback as about 300 of its 700 dealers are cut.

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Nicolas Van Praet, Financial Post
Published: Friday, May 15, 2009

This letter is to inform you that on May 14th, 2009, we are filing a motion in bankruptcy court rejecting the Sales and Services Agreement(s) between Chrysler Motors LLC and the dealership listed ...

Danny Roy got a United Parcel Service letter from Chrysler LLC yesterday telling him he wasn't needed anymore to sell the automaker's Dodge Ram trucks and Town & Country vans. The only thing saving him now, he says, is that he also sells Chevrolets.

"We're mad. We're shocked," the North Dakota dealer said in an interview last night. "It was a very big surprise. We're the only Chrysler dealer for [miles and miles]."

Mr. Roy's D&B Motors in Langdon is one of 789 new-vehicle dealers in the United States Chrysler wants to weed out by June 9 as it scrambles to shrink its business. The automaker has asked the U. S. Bankruptcy Court for approval to cull its 3,200-strong dealer body by roughly one quarter.

Mr. Roy is wondering why he's the unlucky one. A 10-minute drive north up Highway 1 from his dealership is the Manitoba border. And in Canada, Chrysler is not touching a single dealership.

Unlike in the United States, where many Chrysler dealers sell models from other manu-facturers, almost all the automaker's Canadian dealers sell only Chrysler's three brands. The company engineered that seven years ago to give its dealers enough scale to stay profitable.

"Over time, economics kind of smoothed everything out and the dealer count in Canada is now at a point which we're comfortable with," Steven Landry, Chrysler sales and marketing chief, told reporters on a conference call yesterday.

Mr. Landry said there are pockets of the country where the company may have too many dealers, namely in Toronto and Montreal, but added Chrysler would work that out through the normal course of business.

By filing for bankruptcy protection in the United States, the automaker is able to break its dealer contracts. By choosing not to file for creditor protection in Canada, it may be missing an opportunity to cull its 450 dealers here.

Chrysler may have 30% too many dealers in Canada, said Michael Lewicki, lead partner of RSM Richter's Automotive Group. The automaker's sales this year are down 31%, worse than the industry's 20% decline. Its market share has shrunk to 12.6% from 14.6%. And with the bankruptcy shadow hanging over it, it may be difficult for dealers to boost business without resorting to heavy discounting. "You have these dealers, some of whom are making money, many are not," Mr. Lewicki said. "The guys that are not, how long can they bleed without a solution on the table?"

Chrysler's Canadian dealers are more profitable than its U. S. retailers, Mr. Landry said. But statistics and anecdotal evidence suggest they are far from perfect health.

By one measure, dealer throughput, they trail many industry rivals. Chrysler retailers sold 514 vehicles per dealership in 2007 while Toyota dealers sold 786 per dealer and Honda sold 699. Another measure, return on sales, is not publicly available.

General Motors Corp. has said it will chop about 300 Canadian dealers from its current stable of 705. Sources say the company has not communicated with its dealer base at all to indicate who are being cut. In the United States, GM will notify at least 1,000 dealers by today that it considers their franchises underperforming.

Job losses from the dealership cuts are difficult to estimate because some dealers may continue operating by focusing on used cars or servicing vehicles. Dealers selling new cars in Canada employ 140,000 people nationwide.

There is no appeal process for dealers that are chopped, Chrysler said, and they will get no compensation. Almost half the dealers deemed surplus sell fewer than 100 new vehicles per year.

"Is there a more humane way we could do it? No," said Jim Press, Chrysler vice-chairman. "This isn't a game of win and lose. This is bankruptcy."

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The final vehicle was due to roll off the assembly line Thursday morning at the GM truck plant in Oshawa, marking the end of 44 years of production and the elimination of 2,600 jobs.

The closure is part of company-wide cuts, with General Motors Canada planning to reduce its workforce by more than half by 2014.

The company and the Canadian Auto Workers are in negotiations on a labour deal that will include concessions that must match an earlier agreement between Chrysler and the union.

"The company's holding the gun to the CAW's head and they either match it or they're gone", 45 year veteran Bob Nesbitt said.

There is some positive news for the company and its workers, as GM plans to launch three of six new products at its Oshawa car plant.

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For General Motors Corp., the task at hand is so difficult that experts say a Chapter 11 bankruptcy filing is all but inevitable.

To remake itself outside of court, GM must persuade bondholders to swap $27 billion in debt for 10 per cent of its risky stock. On top of that, the automaker must work out deals with its union, announce factory closures, cut or sell brands and force hundreds of dealers out of business — all in three weeks.

"I just don't see how it's possible, given all of the pieces," said Stephen J. Lubben, a professor at Seton Hall University School of Law who specializes in bankruptcy.

GM, which has received $15.4 billion US in U.S. government aid, faces a June 1 government deadline to complete its restructuring plan. If it can't finish in time, the company will follow Detroit competitor Chrysler LLC into bankruptcy protection.

Although company executives said last week they would still prefer to restructure out of court, experts say all GM is doing now is lining up majorities of stakeholders to make its court-supervised reorganization move more quickly.

"If we need to pursue bankruptcy, we will make sure that we do it in an expeditious fashion. The exact strategies I'm not getting into today, but we'll be ready to go if that's required," chief executive Fritz Henderson said last week.

Bondholders reluctant to sign on to stock swap
The threat of bankruptcy, however, may be just a negotiating ploy to pull reluctant bondholders into the equity swap deal.

In Chrysler's case, some secured debtholders resisted taking roughly 30 cents on the dollar for what they were owed, but most gave in after they were identified in court documents.

Henderson, who took over in March when the government ousted Rick Wagoner, said last week there's still time to get everything done by the deadline, although he conceded it will be difficult to meet a government requirement that 90 per cent of its thousands of bondholders agree to the stock swap.

The biggest obstacle to GM restructuring out of court appears to be its bondholders, who have been reluctant to sign on to the stock swap when the government and United Auto Workers union would get far more stock in exchange for debts owed by GM.

GM has proposed issuing 62 billion new shares, 100 times more than the 611 million now offered publicly.

Even though the U.S. government has agreed to back up GM and Chrysler new-car warranties, potential car buyers already view GM as if it's in bankruptcy, reflected by the company's steep revenue drop in the latest quarter, Lubben said. On Thursday, GM posted a $6-billion first-quarter loss and said its revenue dropped plunged by nearly half, largely because bankruptcy fears scared customers away from showrooms.

"I don't think anyone is buying cars from a company who is wringing their hands about a potential bankruptcy for the past year or so," he said.

Under Chapter 11, a company can stay in operation under court protection while it sheds debts and unprofitable assets to emerge in a stronger financial position.

At this point, GM needs to resolve the uncertainty and get in and out of bankruptcy as quickly as possible, Lubben said.

The company is talking with the UAW and Canadian auto workers unions about concessions, including getting the UAW to take roughly 39 per cent of its stock in exchange for half of the $20 billion GM must pay into a union-run trust that will take over retiree health care payments next year.

About 50 per cent of the stock would go to the government for its loans. GM said last week it would need another $2.6 billion in May and $9 billion more for the rest of the year, bringing the total to $27 billion.

One per cent would go to current shareholders, with bondholders getting the other 10 per cent.

Bondholders are reluctant to take the deal because the government and UAW are getting far bigger stakes in the company, said Kevin Tynan, an industry analyst for Argus Research in New York.

"When you look across at what the union is getting and what the government is getting, to expect them to take 10 per cent is just unrealistic," he said.

Cutting dealers also remains a huge hurdle, with GM hoping to shed 2,600 of its 6,246 dealerships by 2010.

But dealers are protected by state franchise laws, and trying to shed them outside of bankruptcy would result in either millions of dollars in payments or multiple lengthy lawsuits, Lubben said.

"That means you've got to negotiate with each one of those dealers individually."

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Ford Motor Co. yesterday unveiled a US$550-million investment to convert an SUV plant near Detroit to build a new generation of Focus small cars in 2010 and a battery-electric Focus in 2011.

Chrysler expects to leave some U. S. plants behind in the reorganization that could be completed within 60 days. Larger rival General Motors Corp. is also expected to close some plants in a restructuring that faces a June 1 deadline.

Ford, which has not taken any emergency U. S. government loans, is converting three of its large North American truck plants to produce smaller, more fuel-efficient vehicles under a broad restructuring that started several years ago.

The automaker posted a company record US$14.7-billion net loss in 2008, but posted a smaller-than-expected first-quarter loss and said in late April that it was on track to at least break even in 2011.

The investment includes US$430-million for manufacturing and US$120-million for launch and engineering costs. Ford also said it would make significant investments in supplier tooling.

Ford said the investment would draw more than US$160-million of Michigan state, county and local tax credits and grants and support about 3,200 jobs. Ford and the UAW are developing new plant work rules to improve productivity, the automaker said.

"The transformation of [the] Michigan assembly plant embodies the larger transformation underway at Ford," said Alan Mulally, Ford's chief executive.

The automaker's truck facility in Wayne, Mich., is the first of the plants to undergo a conversion. It once built the Ford Expedition and Lincoln Navigator, large sport-utility vehicles.

The Michigan assembly plant opened in 1957 and was one of the most profitable plants in the world during the SUV sales boom in the late 1990s.

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General Motors Corp said it burned through $10.2 billion in the first quarter, operating under a federal bailout, as auto sales fell across the globe and it scrambled to cut costs.

The automaker on Thursday posted a quarterly net loss of $6 billion, compared with a loss of $3.3 billion a year earlier.

Revenue dropped by almost half to $22.4 billion as sales plunged in North America and fell in Europe, Asia and Latin America.

GM is facing a government-imposed June 1 deadline to reach agreements to overhaul its operations and cut more than $40 billion in debt. The company has taken $15.4 billion in emergency loans from the U.S. Treasury to date.

The first quarter was also marked by GM's failure to win new federal backing for a turnaround plan that the U.S. autos task force concluded was too slow-moving and too cautious to succeed.

The Obama administration ousted Rick Wagoner as GM chief executive at the end of the first quarter.

The automaker said on Thursday that it had not yet reached the deal it needs with the UAW. It also said the Treasury had not yet agreed to convert half of the loans it has extended to GM into stock in a restructured company.

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PARIS — Fresh from his deal for Chrysler, Fiat’s chief executive was in Berlin on Monday to determine whether he might add to his kingdom by acquiring General Motors’ European operations.

Sergio Marchionne, who clinched a deal for a 20 percent stake in Chrysler with creditors and the United States government just before a deadline last Thursday, was meeting with German officials including the economics minister, Karl-Theodor zu Guttenberg.

Mr. Marchionne has said that to be competitive in the current market, an automaker needs to make at least five million vehicles a year, with one million units on each car platform, to
succeed. That is more than double Fiat’s current scale.

A combined Fiat, Opel and Chrysler would have annual sales of about 5.5 million units and revenue of about 80 billion euros, or $106 billion.

Ferdinand Dudenhöffer, director of the Center for Automotive Research in Leverkusen, Germany, said that a joint Fiat-Opel would offer greater volume but that there would be a number of disadvantages to the combination, some very acute.

Fiat’s hefty debt load would prevent it from investing heavily in new, energy-efficient technology, Mr. Dudenhöffer wrote in a new study. Also, the automaker is a “very emotionally run organization,” with a history of frequent management changes.

“A whole series of reasons show that a takeover of Opel by Fiat would bring clear dangers,” he wrote. “Opel would not be more secure after a Fiat takeover, but would face markedly greater risks.”

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Chrysler's Canadian assembly plants shut down indefinitely Friday, a byproduct of the company's bankruptcy protection filing in the United States.

Both of the company's Ontario assembly plants in Windsor and Brampton are now closed as their stream of parts from suppliers has dried up.

Roughly 2,700 employees at the Brampton plant and 4,400 in Windsor are affected by the shutdowns.

A Chrysler parts plant in Etobicoke is still operating, but it will shut down in 10 days, affecting 300 workers, said Mary Gauthier, a Chrysler spokesperson

The company said Thursday that all of its plants would be closed down for 30 to 60 days while it went through restructuring under court-ordered creditor protection.

Chrysler Canada has not filed for bankruptcy protection.

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General Motors Canada announced yesterday it will park more than half its workforce by 2014 and shut two of every five dealerships by Dec. 31.

Closing 42% of the 705 dealerships will hit 12,000 staff, the Canadian Automobile Dealers Association said.

At Oshawa's largest GM dealership, Mills Pontiac Buick GMC, general manager Jason Craine said, "that plan has been in place for awhile.

"We don't know exactly" which will shut, but he said most will be in big centres.

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Anyone wondering what the future of Chrysler LLC looks like should watch Chrysler vice-chairman Jim Press's presentation at the New York Auto Show.

The former Toyota executive rolled on to the stage at the Jacob Javits Convention Center riding in a Fiat 500. Since Fiat and Chrysler, despite rampant speculation, have so far failed to sign a concrete partnership, I'll take that as a sign of just how desperate Chrysler needs a partner to save this latest downturn in its fortunes.

That Chrysler needs Fiat -- itself facing financial trouble and having suffered from the same bi-polar boom-or-bust mentality as the Auburn Hills, Mich. firm -- is without question. Still, the deal has yet to be finalized, even though U. S. President Barack Obama's automotive task force seems to include the Italian white knight in all its forecasting for a Chrysler recovery.

In perhaps the most telling indication of just how far Chrysler's -- and the entire automotive industry's -- fortunes have fallen, it's worth noting that in exchange for its stake in Chrysler, Fiat has to pay, well, nothing. Yes, Fiat looks to a become the largest -- perhaps even a majority (some day) -- shareholder in one of the former Big Three without coughing up any money.

As Fiat CEO Sergio Marchionne makes clear, his company won't assume any of the company's debt, an important detail considering the news that Daimler AG, Chrysler's former master, still owns 19.9% of the company. And Daimler recently announced that any bankruptcy proceedings will cause it further financial grief despite the fact it has already written off as worthless its entire stake in Chrysler. Chief financial officer Bodo Uebber notes that Daimler is still on the hook for as much as US$1-billion in Chrysler's pension fund obligations.

Despite this quagmire, the Chrysler deal, and the infrastructure/ dealer network that goes with it, must seem awfully attractive to Fiat. After all, its sole expense is developing products to suit North American needs and standards, and North America is still the most lucrative market for automobiles in the world. In return, it would get an initial 20% stake in Chrysler, a number that could rise to 25% when the first Fiat engine is certified for sale in the United States, 30% when the U. S. production of Fiat-based automobiles begins and 35% when the first American-made Fiat is ready for export.

This last is extremely important as one of Chrysler's weaknesses is its almost total dependence on domestic sales. Unlike Ford and General Motors (which just recently announced a desire to double its already strong Chinese sales), Chrysler sells slightly more than 200,000 units outside of its domestic markets, barely 20% of what GM sells in China alone.

Another obvious part of the benefit of merging/aligning with Fiat is the Italian company's strong international infrastructure, with a deep presence in all of South America and throughout Europe.

Also worth noting is that Fiat could end up in a majority position, but only after the US$4-billion bailout Chrysler has already received and the US$6-billion still earmarked for its use has been repaid. Ironically, both Cerberus -- which owns 80% of the company -- and Daimler -- with the remaining outstanding shares -- will likely become minority shareholders as their stakes are further reduced, since both the United Auto Workers and current bondholders will likely have to swap part of their debt obligations for equity positions in the reformulated company. Sources note that Daimler and Cerberus could end up with less than 10% between them.

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Along with harsher demands, President Obama offered support last Monday for General Motors Corp. and Chrysler LLC, hoping to soothe consumers' fears about buying new vehicles from automakers teetering on the brink of bankruptcy.

The main source of support is the Warranty Commitment Program, which has been designed by the Treasury Department to ensure that customers buying a new vehicle will still have a warranty even if GM or Chrysler slides into bankruptcy and is forced to restructure — or, even worse, liquidate its assets.

The president is giving Chrysler and GM more time to come up with stronger restructuring plans that involve renegotiating contracts with the United Auto Workers union and bondholders. But if that doesn't work out, a bankruptcy filing is imminent.

Many consumers — reasonably enough — say they wouldn't buy a car from a bankrupt automaker. So the government has taken steps to ensure that the buyers of GM and Chrysler cars won't be left out in the cold.

Here are some questions and answers about the warranty program.

Q: What exactly is this program?

A: Starting Monday, consumers who purchase a GM or Chrysler vehicle will have their warranties honored in the event that the maker of their car or truck goes into bankruptcy.

The government will finance the companies' cost to repair covered vehicles at the dealership or through a third party. The funds will be set aside in a separate federal account. The companies will provide 15 percent of their expected warranty costs, with the government covering the rest.

The funds are slated to come from the government's Trouble Asset Relief Program (TARP). The Treasury wouldn't say how much money it's putting up for the program, but it's expected to be in the millions — significantly less than the $17.4 billion in bailout money the companies have already received.

Q: I just purchased a car March 14. Is my car covered?

A: Unfortunately, no. The plan is available for vehicles purchased during the companies' "restructuring period," which the Treasury is defining as beginning on March 30/09. The period will end when the companies emerge from restructuring — in other words, when they are viable without government help, or emerge from a bankruptcy.

Q: Are only Chrysler and GM cars covered? What about Ford and foreign automakers?

A: Any U.S. manufacturer is eligible to participate in the plan, though Ford Motor Co., which is not seeking government aid, is not expected to do so.

"Ford does not plan to participate in the program as we foresee no issues honoring warranties for current and future customers," said company spokesman Mark Truby.

Foreign automakers are not eligible to participate.

Q: How do I get repairs under the government-backed warranty?

A: Consumers don't have to do anything out of the ordinary. The program is primarily a financial one that would allow GM or Chrysler to cover the cost of repairing your car free of charge, or under terms of the warranty, should the companies enter bankruptcy.

Q: Will taxpayer money end up being used to repair people's cars?

A: Any court-ordered bankruptcy is likely to have a quick turnaround — versus the years of court proceedings often associated with bankruptcy. As a result, it's unlikely that taxpayer funds would have to be used to pay for warranty repairs.

Q: How does this differ from the warranty that would normally come with my new vehicle?

A: It isn't different — it's the same warranty that comes with the vehicle.

Aaron Bragman, research analyst for IHS Global Insight in Troy, Mich., calls the program "a piece of a larger puzzle."

"The government's main responsibility here is to restore consumer confidence — that their job, home and investments are secure," Bragman said. "Whether or not that's going to make a difference remains to be seen."

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Magna International, the world's most diverse auto parts supplier, announced a vehicle-development partnership with Ford Motor Company to introduce a zero-emission lithium-ion battery electric vehicle (BEV) to be delivered to market in 2011.

The electric vehicle, which Ford announced at this year's North American International Auto Show in Detroit as a key vehicle in their electrification strategy, will be a small car with an expected range of up to 100 miles without using a drop of gasoline and without compromising customer performance expectations. The Ford BEV is expected to offer consumers a familiar driving experience - it will operate similar to a conventional vehicle, but with smoother acceleration, less noise and zero emission.

"This vehicle adds an important piece to Ford's product lineup with a zero-emission vehicle that will be both affordable and meets customers' needs," said Don Walker, co-CEO of Magna International. "In addition, the joint partnership demonstrates valuable OEM/supplier collaboration by sharing in the expertise and investment that the auto industry now requires for new advancements in energy independence and reduced CO(2) emissions."

"Our collaboration with Magna on a Ford BEV is the result of a shared vision of the potential of electrification in transportation," said Derrick Kuzak, Ford's group vice president, Product Development. "This partnership leverages the technical expertise of two global companies to achieve a common goal, delivering a no-compromise, zero- emission, battery powered car for the retail market."

Magna will be responsible for providing critical components that make-up the powertrain and battery modules in the vehicle. In addition, Magna will also play a key role in the engineering required to integrate the electric propulsion system and other new systems into the vehicle architecture.


Vehicle/Technology Specifications:

- Battery pack expected range of up to 100 miles;

- On-board battery charger capable of plugging into a 110- or 220-volt
standard outlet;

- Expected 12 hour charge time at 110 volts; 6 hours at 220 volts;

- High-voltage powered HVAC compressor; and

- High-voltage auxiliary heater.

The partnership with Ford and development of the Ford BEV demonstrates Magna's commitment to industry-leading innovation in materials, processes and products. From reducing mass to increasing comfort and forging new paths in customer collaboration, Magna's expertise in design, engineering and manufacturing continues to play a role in the development of next-generation cars and trucks.

About Magna International

Magna International Inc.
337 Magna Drive
Aurora, Ontario
Canada
L4G 7K1

Magna International is the most diversified automotive supplier in the world. We design, develop and manufacture automotive systems, assemblies, modules and components, and engineer and assemble complete vehicles, primarily for sale to original equipment manufacturers of cars and light trucks in North America, Europe, Asia, South America and Africa. Our capabilities include the design, engineering, testing and manufacture of automotive interior systems; seating systems; closure systems; metal body and structural systems; vision systems; electronic systems; exterior systems; powertrain systems; roof systems; as well as complete vehicle engineering and assembly.

Magna has approximately 77,500 employees in 241 manufacturing operations and 86 product development and engineering centers in 25 countries.

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By Bill Vance, Canwest News Service

As automakers prepared their new models right after the Second World War, they tried to disguise the fact that what they had to offer was nothing more than warmed-over 1942 cars. One way was to inject a little pizzazz into them, hoping to provide a halo effect for the more prosaic offerings.

Ford's attempt at pizzazz was to combine the appeal of the convertible with the upscale cachet of the wood-panelled station wagon. The result was the Ford Sportsman, a convertible coupe with its body sides and trunk covered by mahogany veneer inserts surrounded by maple or birch framing. And it was real wood, not the plastic-simulated variety of later years. Ford's supply came from its own huge forest and sawmill at Iron Mountain in northern Michigan.

Ford wasn't alone in following this recipe. Chrysler had made a woody model in 1941-'42 called the Town and Country, and carried it and the name over to post-war woody cars. Chrysler went even further than Ford and applied wood to both sedans and two-door convertibles. Nash also had a wood-trimmed Ambassador Suburban sedan from 1946 to 1948.

And there was also the matter of maintenance. Like wooden boats, woody convertibles and wagons had to periodically have the wood tightened up and refinished.

But woody wagons and convertibles are now sought-after collectibles worth many times their original price.

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Chrysler LLC has warned that it could close its plants in Canada unless it gets enough concessions from its workers, along with government aid and resolution of a tax dispute.

Chrysler president Tom LaSorda told the House of Commons Finance Committee on Wednesday that the concessions deal between the Canadian Auto Workers union and General Motors is not acceptable to Chrysler.

LaSorda said if the CAW-GM deal were applied to Chrysler, it wouldn't eliminate even half the labour cost gap with Japanese auto plants in Canada.

Chrysler Canada is also involved in a dispute with the federal government over up to $1 billion in back taxes due to a reassessment by the Canada Revenue Agency.

Chrysler has asked for about $2.8 billion in aid from the Ontario and Canadian governments.

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A great collection of classic American automobile ads from the 40's 50;s and 60's, put to music on a 4 minute video.
Would love to have any of them in my personal garage.

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