History and Purpose of asrTrust

History and Purpose of asrTrust

In 2008 and 2009, the global financial system imploded as a result of reckless financial speculation in U.S. real estate and derivatives. As banks collapsed around the world, one of the first casualties of the crisis was the North American auto industry. The Detroit Three producers (GM, Ford, and Chrysler) experienced a dramatic 50% decline in sales. They were already fragile after years of shrinking market share and huge losses. By the end of 2008, GM and Chrysler ran out of operating cash and were unable to continue normal operations.

The governments of the U.S., Canada, and Ontario then undertook a remarkable effort to save these important companies. They understood that if GM and Chrysler collapsed, a disastrous economic meltdown would ensue. So in the spring of 2009, a difficult and complex set of negotiations took place involving all 3 governments; the 3 companies; their bondholders, investors, suppliers, and dealers; and the major unions (the CAW in Canada, and the UAW in the U.S.).

The joint Canada-Ontario contribution to the restructuring totaled over $10 billion for GM Canada, and $4 billion for Chrysler Canada. In return for the funding which they committed to the two companies, the Canadian governments demanded certain conditions - to enhance the chance that the companies, after restructuring, would be able to survive in the long-run, and make a continuing large contribution to Canada's economy.