Ottawa announced Wednesday that it would spend up to $185 million to back warranties on GM and Chrysler vehicles.
The feds say they want to protect consumers and parts suppliers faced with a potential bankruptcy by General Motors of Canada and Chrysler Canada.
U.S. authorities made a similar announcement last week. The move is meant to reassure consumers that when they buy a vehicle from GM or Chrysler, their warranty will be effective.
That's good news for consumers: probably better news than all the bailout money. It is hard to believe that just three years ago, these companies were posting record profits. .
So what happens if GM and Chrysler file for bankruptcy?
It may not be a bad thing for consumers or some companies.
There are several big auto parts manufacturers which already make parts for these vehicles and may be poised to step in and make vehicles if GM and Chrysler can't restructure.
Magna International has wanted to do this for years. It already makes a lot of the parts - in fact whole sections of vehicles.
A restructured GM or Chrysler might just design the vehicles. Magna could build them. So parts for the vehicles will still be available even if GM and Chrysler shut down for good.
The bottom line for consumers?
Make your car buying decision based on what you are looking for in a vehicle: reliability, quality, value for money.
All car companies are hurting these days so you may just find a bargain that was unthinkable even a year ago.
With a report by CTV British Columbia's Chris Olsen
