The Government has hired an advisor to help it understand the competitiveness and situation of North American auto makers plants in Canada. The report will also assess the competitiveness of Canadian plant relative to other North American plants.
This information will be vital in establishing both economic and investment objectives if and when an auto company should come asking for assistance. Such a request may well be likely if the North American auto industry falls victim to a double dip recession, which has a moderate probability in the US and an only slightly lower probability in Canada.
This scenario is an example of how the Canadian economy might be sideswiped by any impacts from a global economic slowdown. North American car companies, which also operate globally, may also see their first issues arise in Europe as fallout from the economic situation over there.
This is an example of Risk Management in action. A wise early step before a likely event that could have big impacts. Gathering data, monitoring the situation, preparing for one of the likeliest scenarios – an investment request from one or more of the sector’s players.