The most widely read magazine for Canadian lawyers
Issue link: https://digital.canadianlawyermag.com/i/50807
many auto-related jobs as possible, poli- ticians and bureaucrats in Ottawa and Toronto deserve much of the credit for the success of the Chrysler Canada restruc- turing, says Richard Higa, who headed McCarthy's finance team on Chrysler. "I think the Canadian government[s] did a pretty good job of responding quickly to protect the [manufacturing] footprint," he says. "They were very quick out into the press saying we will commit 20 per cent or whatever the proportionate share is of the Canadian production." Chrysler emerged after barely one month under U.S. Chapter 11 protection in June with Italian automaker Fiat tak- ing control of the company, and U.S. and Canadian governments and other parties taking stakes in the company. GM Canada dealer downsizing Perhaps the most controversial compo- nent of GM Canada's restructuring was the decision to shutter 240 of its 705 dealers by the end of 2010 and another 50 through attrition. Some of its dealer base was shocked by the move to close The Sedona Conference® more than one third of GM's outlets and at least one southern Ontario dealer says he has hired legal counsel to contest his store's closing. It has been reported that GM Canada will pay franchisees of loca- tions slated for closure a payment ranging up to more than $1.5 million and they are also eligible for an allowance for signage removal. Settling on fair compensation repre- sented "huge, huge amounts" of work with GM Canada and its legal teams, says a lawyer associated with those delibera- tions who requested anonymity. "There is an art to out-of-court restructuring. One of them is trying to come to a deter- mination to what is fair and reasonable and then trying to convince people that that is correct." The absence of wide- spread opposition to the GM franchise closures is a reflection of that successful balance, the lawyer argues. "It allows for an orderly wind down for some of these dealerships and therefore doesn't impact the communities in which they operate as hard as a sudden slam down, if you would," says GM's counsel MacDonald. Richard Gauthier, president and CEO of the Canadian Automobile Dealers Association, says GM did not consult his association about the closures and it is not a role CADA would take. "If they had asked us our views on that we would have told them not to close any deal- ers." CADA's main role to date has been to inform affected dealers what options they have. "Dealers want to know if a) can GM do this? b) what does my dealer sales and service agreement allow for? Dealers primarily have to make their own individual business decisions in this regard." He noted that more than 90 per cent of dealers have agreed to accept GM Canada's closure offer. The most vocal opponent of the clo- sures, Grimsby, Ont., dealer Bob Slessor of Robert Slessor Pontiac Buick GMC, says he has retained counsel and is work- ing with an unspecified number of fellow dealers to fight the closures. "There is a dealer group that has started to form. I would say that it would be a noticeable- sized group." Gauthier say his group's legal stance Sedona Canada Working Group presents the SM Second Annual Program on Getting Ahead of the eDiscovery Curve in Canada Wednesday - Thursday, September 16 - 17, 2009 Hyatt Regency Vancouver, British Columbia Featuring renowned faculty including esteemed members of the Bench, leading practitioners and experts, this Conference provides a rare opportunity to gain valuable insight into best practices for eDiscovery from the non-profit law & policy think-tank that developed The Sedona Canada Principles Addressing Electronic Discovery. For the complete Agenda, faculty, faculty Bios & TO REGISTER, go to www.thesedonaconference.org/conferences/tsci/20090916 or CALL 1-602-258-4910. THE INSTITUTE onference 34 A UGUST 2009 www. C ANADIAN Law ye rmag.com Sedona_CL_Aug_09.indd 1 R SM REGISTRATION is limited to 75, on a first-come, first-served basis. JOIN US! 7/9/09 2:11:40 PM