Meeting Ontario's Goals in the Restructuring of General Motors of Canada Limited
(5 pages of text)
On December 20, 2008, Ontario’s premier, Dalton McGuinty, and Canada’s prime minister, Stephen Harper, announced their decision to provide $3 billion in interim loans to General Motors of Canada Limited. Due to the 2008 economic downturn and declining auto sales, the company had drawn from its cash reserves in an effort to maintain operations and, as a result, was facing insolvency. The automaker accounted for approximately 19,000 direct jobs in Ontario, and its collapse would mean a great economic loss for Canada. The provincial and federal governments needed to work together to support the company and, in doing so, also support Canada’s economy during this financial downturn. Ontario’s assistant deputy minister of Finance needed to determine the best way to proceed with the proposed financial plan, while also working with multiple governments and appeasing public opinion.
This case is suitable for senior undergraduate, graduate, and executive education courses in business and public policy, strategy, and leadership. Upon completion of this case, students will be able to:
- identify the key intersection of business and government, (i.e., government’s financial responsibility towards companies that have a large impact on the economy);
- understand the complexities of working with multiple governments that have different interests, ideologies, and varying degrees of influence;
- develop a strategy to bridge the significant interests among these stakeholders;
- explain how business and government interact in the auto restructuring process; and
- examine the bailout process that political staff and public servants must follow.
Canada, Large, 2008
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