Ford Canada's top executive said Ottawa's top two priorities to help the ailing auto industry ought to be fixing broken credit markets and improving a scrappage program that provides incentives for consumers to junk old cars and buy new ones.
Ford Canada CEO David Mondragon told MPs Monday night that manufacturers like Ford are having trouble raising enough cash to sustain their lending and leasing businesses, key components of the automotive retail chain.
Without the ability to help finance the purchases of its customers, many consumers simply can't afford to buy or lease a new car and that, in turn, hurts manufacturers.
In normal years, consumers look to car and leasing companies for about $60 billion a year worth of financing to acquire new cars. That market has virtually ceased to exist, Mondragon said.
When asked by one MP how the federal government can help make the auto industry sustainable, Mondragon replied, “First and foremost, it's strengthening and stabilizing financial markets. Without a financial market that's viable, without the ability for auto manufacturers to finance vehicles for their dealers, finance vehicles for consumers and keep a robust trade cycle in place, the industry will not strengthen and will not grow.”
Unlike its Detroit-based cousins, General Motors and Chrysler, Ford has not asked either the U.S. or Canadian governments for financial help . . . [Read the rest of the story]