The Canadian government announced plans today to offer GM, Chrysler up to $4 billion in bridge loans to continue operations.

Under the announced plan today, the Canadian government will earmark $1 billion for Chrysler, $250 million of witch will become available immediately, and an additional $500 million by sometime in April. Part of the deal, Chrysler must interest notes equal to 6.67% of the aggregate loan.

GM would receive the remaining $3 billion. Read the full story

GM CEO Rick Wagoner, 56, has just announced he will be stepping down from his post because of pressure from the Obama administration. Wagoner has worked at GM during his entire career, joining GM’s treasury department in 1977 immediately following earning his MBA from Harvard.

GM and Chrysler have already received $17.4 billion in loans since December 2008. GM and Chrysler collectively say they need an additional $21.6 billion in loans just to survive. Ford says it will not require any more government help to wither out the financial crisis.

The news comes as Obama is set to unveil his new round of emergency government bailout loans for the auto sector Monday 11AM EST. Obama says the big three have not yet done enough to restructure.

It is currently unclear as to who will replace Wagoner.

According to newly released data by Autodata, US car sales pumped once again in February by 41% to 688,909 cars, the lowest monthly sales figures since 1981. Deliveries for the month were up 4.9% over January.  GM had the fewest vehicle sales, down 53% to 127,296 vehicles in February. GM’s market share fell to 18.2% from 22.7% as a result of the poor sales. GM says the figures are the worst in over 40 years. GM is now seeking about $16.6 billion in new loans from the U.S. fed, on top of the $13.4 billion already approved. Ford sales fell by 48% to 96,044 cars in February, but the company says it will not seek additional federal aid.

January 2009 Ford sales numbers are in, and they could be the worst seen in the auto industry in over 22 years. Fleet sales were down 65% overall as demand from key buyers including rental car companies was down significantly. Mercury, Lincoln, and Ford sales were down 39% in January. Analysts were expecting closer to 30%

Things are getting worse for the second-largest automaker Ford. The company has just announced disappointing Q4 figures. Total revenue was down 36% to $29.2 billion (lost $2.46 per share) in Q4 2008. In 2008, the company lost $14.6 billion. Ford has now announced it will cut 1,200 jobs from its credit division and will not seek additional federal aid but instead will borrow $10.1 billion from existing credit lines to get through 2009. Ford Chief Financial Officer Lewis Booth projected more than a 10% fall in 2009 worldwide car sales. He also said the current economic state is “so volatile” and “unprecedented”.

Breaking now, auto part maker Magna International has announced a new joint venture with Ford Motor Company to jointly develop a new electric car. The new car will be based entirely on electricity and can operate up to 160km before a second charge is necessary. Magna says the car will take up to 12 hours to charge on standard volts. Magna said it would be responsible for developing power-train, battery and other critical modules. The expected market launch is set for 2011, but it will likely be a bit later. The Chevy Volt electric car is also expected to launch in 2011.

Investor Kirk Kerkorian has just sold all of his shares in Ford. Kerkorian has always been a up spoken supporter of the company, but has now sold all of his remaining shares at significant losses. In October 2008, Kerkorian sold 7.3 million shares at about $2.4 each, and has now sold the remaining 133.5 million shares. The US automakers continue to face increased competition, labor cost problems, and low international demand. It looks like Kerkorian believes the Ford stock could further decrease, indicating he would rather cut his losses.

Canada previously announced on Dec 13 08 that $2.8 billion in emergency bailout loans would become available to the automakers, if the US introduced a bailout first. As the Bush Administration has now approved a $17.4 billion bailout, Canadian PM Stephan Harper is set to announce details on a Canadian automaker bailout this Saturday. Ottawa previously announced it will pledge up to $2.8 billion in aid to the auto-sector in Canada, a proportional amount in terms of Canada’s 20% North American auto sector share. If we use the auto-sector share as an indication as to what amount Canada will provide for the bailout, the amount could top $4 billion, almost double than what was previously announced.

The Bush Administration today has approved an emergency bail out for the Big 3 US Automakers to the tune of $17.4 billion. Bush said “it would worsen a weak job market and exacerbate the financial crisis,” if a bailout was not implemented. President-elect Barack Obama also praised the bailout. $13.4 billion will become available within the next two weeks or ago, while the remainder will become available in Jan. There are reports an additional $4 billion could become available in Feb 09. GM will get the most out of the plan with $9.4 billion; the rest will be split evenly between Ford and Chrysler, who will get $4 billion each. The Big 3 need to particularly reduce labour costs and build better vehicles to sustain their companies in the future, otherwise, we run the risk of more bailouts, and ultimately the insolvency if these fundamental problems are not addressed. I personally believe we all needed this bailout as the collapse of the automakers would have caused significant and irreversible harm to everyone particularly in the US and Canada. Please see this report that highlights possible job losses if the automakers went under, and my article that highlights my thoughts on a GM bailout.

Ottawa has announced it will pledge up to $2.8 billion in aid to the auto-sector in Canada, a proportional amount in terms of Canada’s 20% North American auto sector share. However, there is one big catch. Washington must budge first for those funds to become available. Canadian Industry Minister, Tony Clement, said at a conference the other day “we expect the American administration to announce something very soon,” and he also said that he believes a US bailout is imminent. Most recently, yesterday, the US Congress failed to pass $14 billion bailout, and GM subsequently announced massive production cuts that saw the temporary layoff of 3,000 people. I do believe a US bailout will come very soon, but the question remains, can GM, Chrysler, and Ford remain competitive and cut costs, or is this bailout going to lead to a cyclical pattern of more bailouts? The question remains, but I know one thing for sure, the people and the economy will suffer a great pain if they go under, and that’s why there will be a bailout. Please see my thoughts on bailing out GM here.