Auto Racing

The federal and Ontario governments announced Thursday they will sell their remaining interest in Chrysler Group LLC for US$140-million to Fiat SpA, leaving taxpayers on the hook for roughly $816-million of the original $2.9-billion lent to Detroit automaker in 2009.

The Canadian governments said they will receive US$125-million for their remaining 1.7% ownership stake in Chrysler, in addition to another US$15-million stemming from the U.S. Treasury exercising an option to purchase shares of the United Auto Workers retiree medical trust. One third will be given the provincial government, with remainder going to Ottawa.

The selling price is roughly in line with the $500-million Chrysler paid the U.S. Treasury for its 6% ownership stake in the automaker in June.

In 2009, the U.S. Treasury, the Canadian governments, and the UAW agreed to help bail Chrysler out of a bankruptcy restructuring. As part of that deal, the Canadian governments lent a collective $1.7-billion to Chrysler, which was repaid in May, in addition to taking an ownership stake in the company.

Those funds, however, were over and above the $1.2-billion already lent the old Chrysler by the Canadian governments, which Mr. Flaherty has said will not be recouped.

After the final stake is purchased by Fiat, the Canadian governments will have collectively received $2.084-billion, including $244-million in interest, of the original $2.9-billion invested in the company, or roughly 72% of their original investment.

“Chrysler’s recent repayment of its loans was an important step in the turnaround of this company,” said federal Finance Minister Jim Flaherty, in a statement. “Canada has now sold its remaining interests in Chrysler Group LLC to Fiat for US$140 million, fulfilling our commitment to exit from ownership of Chrysler as quickly as possible while maximizing value for taxpayers.”

Mr. Flaherty defended the bailouts of both Chrysler and General Motors in 2009, saying it was pivotal in saving 52,000 Canadian auto sector jobs.

Ontario’s finance minister, Dwight Duncan, echoed those remarks.

“The auto sector is a key driver of the Ontario – and the Canadian – economy. Working together, our governments helped keep people employed, allowing them to continue to provide for their families,” he said. “The proceeds that Ontario will receive from this transaction will go toward deficit reduction.”

© Copyright (c) National Post

TORONTO – Volkswagen AG believes it will need a second assembly plant in North America within the next few years and Ontario says it will compete for that investment.

“We’ll be in the game,” said Economic Development and Trade Minister Sandra Pupatello on Monday after weekend reports that the Germany-based auto giant is considering a plant for its luxury Audi brand.

Audi chief executive Rupert Stadler told Automotive News that the division needs new production capacity because it can’t keep up with demand and it will make a decision by May next year.

He also revealed Audi is considering engine and transmission plants as the company pursues an aggressive international growth plan.

Pupatello, who is not running for re-election this fall, would not comment on any progress in luring a sixth automaker to Ontario, North America's biggest jurisdiction for vehicle production. General Motors, Ford, Chrysler, Toyota and Honda already build cars and trucks here.

Audi has started to run into inventory problems in North America during the last year and is having difficulty keeping up with North American demand from dealers.

In Canada, Audi’s sales have shot up 18.8 per cent to 8,819 vehicles in the first half of the year from the same period in 2010.

Volkswagen’s sales have also jumped in the last year. In the first half, business soared 17.7 per cent to 26,942 vehicles.

The Canadian Press

TORONTO — Keep off your cellphones and keep your eyes on the road if you don’t want to attract the attention of police.

Provincial police officers are kicking off their second “Phone in One Hand, Ticket in the Other, Distracted Driving Campaign.”

Starting today, officers will be stopping any drivers caught using a hand-held communications device.

They will also be stopping people who re drive carelessly because they are adjusting the radio, eating or searching for something in their vehicle.

Using a cellphone could bring a $155 fine while a careless driving conviction ranges from $400 to $2,000.

The OPP charged 8,522 drivers last year for using a hand-held device while driving.

In 2010, there were more than 7,000 collisions on OPP-patrolled roads due to distracted driving resulting in 35 deaths and over 1,000 injuries.

Yokohama, Japan – Nissan has announced its "Power 88" midterm business plan, aimed at accelerating the company’s growth across new markets and segments. The plan is for fiscal years 2011 to 2016 and is effective immediately.

Under the plan, Nissan aims to achieve a global market share of eight per cent and increase its corporate operating profit to a sustainable eight per cent by fiscal year 2016.

The highlights include:

- An average of an all-new vehicle every six weeks for six years. The company’s global portfolio will have 66 vehicles and will cover 92 per cent of all markets and segments.

- The emphasis on sustainable mobility will continue, including zero-emission vehicles and low-emission technologies. Cumulative electric vehicle sales for the Renault-Nissan Alliance will reach 1.5 million units.

- Dedicated new cars and light commercial vehicles will be developed for entry-level segments and emerging markets.

- Nissan will introduce more than 90 new advanced technologies, averaging 15 per year.

The company currently has 6,000 major points of sale globally and will expand its retail network to 7,500 during the period. The business expansion will focus on growth markets and further developing the company’s Infiniti and light commercial businesses.