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Ontario: Worldwide Automotive Giant

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Commercial Real Estate Agent with RE/MAX West Realty Inc., Brokerage (Toronto)

Ontario: Worldwide Automotive Giant

 


By Brian Madigan LL.B.

Well, it could be! This is the time for opportunity. Ontario's annual income is about $100 billion dollars. The automotive bailout is $25 billion or about 3 month's income. That is the entire North American bailout, not just Ontario.

Falling into line, Ontario will do something. It will follow suit, and contribute half of Canada's share, or about 1.25 billion dollars. Now, that's a lot of money.

But, the opportunity is really for Ontario to LEAD, step up to the plate and make the best possible deal with GM, Ford and Chrysler with all the guarantees that can be negotiated, including stock options at this precarious time.

GM is now worth about $2.88 billion. It's stock has dropped 90% in less than one year. If you were ever going to buy GM, now would be the time.

The opportunity arises because of the intransigence of the US Government at the moment. There is a lame duck President and a lame duck Congress. However, the emergency is now.

If Ontario were to go it alone and rescue the entire North American auto industry, there would be substantial dividends, even just in the short term. The US Government and the individual states will all want to participate in the bailout process. No one wants to lose the auto industry.

If Ontario were to go it alone, Ontario could become the greatest manufacturer of automobiles and trucks worldwide.

Everyone knows that the problem is temporary. There was an oil crisis. The price peaked this past summer. Consequently, there were too many unwanted gas guzzlers. They still sit on the lots. Then, there was a world financial crisis in the banking system. Basically, no money for anybody, anywhere to buy anything, including buying and leasing vehicles.

Is this forever? No, there are already good plans on the drawing board. And, oil prices have come down to less than $50/barrel. That's almost two thirds off. So, the consumer would buy cars if there was any money around.

Maybe this is just too good a deal. Why not wait for a true leader? On 20 January 2009, Barack Obama will demonstrate how it's done. Hopefully, Ontario will be around to pick up the leftovers.

It certainly would be helpful from a real estate perspective.

Brian Madigan LL.B., Realtor is an author and commentator on real estate matters, Coldwell Banker Innovators Realty
905-796-8888
www.OntarioRealEstateSource.com

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