Thank you very much, Mr. Chairman.
On behalf of Chrysler and Chrysler LLC, it is our privilege and pleasure to be here in front of the committee this evening. We will have 10 to 15 minutes of opening remarks, if that is okay. Mr. LaSorda and I will tag-team these remarks. I will start them off.
There is no question that these are very challenging times, not only for the global economy but also for the automotive industry, and Chrysler Canada in particular. I'd like to provide and start off with an overview of Chrysler Canada's operations and then speak to some of the critical factors affecting our competitiveness in Canada, our future Canadian manufacturing plans, our restructuring and long-term viability, and then speak briefly about our pending alliance with Fiat.
Following our remarks, we will be happy to answer any questions from the committee.
To begin, Chrysler Canada is headquartered in Windsor, Ontario, and we have a significant presence in Canada and a significant impact on the Canadian economy.
Chrysler operates vehicle manufacturing facilities in Windsor and Brampton, Ontario, and a castings plant in Etobicoke. In addition, we operate an award-winning research and development centre in Windsor, in partnership with the University of Windsor. Over the past 20 years, this centre has led and supported many advanced technology development programs, such as propane-fuelled vehicles, natural-gas-powered vehicles, and more recently, electric vehicle technology.
Chrysler Canada also has office and distribution centres in Toronto, Montreal, Calgary and Red Deer. Including our Chrysler Financial operations, the current direct employment by Chrysler is about 9,400 employees.
There are also 451 dealer locations throughout the country, employing close to 26,000 employees, who are exclusively dependent upon the sale and servicing of Chrysler vehicles for their livelihood.
From a supplier standpoint, there are 407 supplier locations providing parts to Chrysler manufacturing facilities. These suppliers employ approximately 50,000. Last year, Chrysler purchased $5.5 billion in goods from these companies.
Last, with 13,000 retirees in total, there are approximately 100,000 Canadians who are directly or indirectly dependent on Chrysler Canada for their well-being.
Chrysler Canada assembles over half a million vehicles a year and sells approximately 230,000 vehicles in Canada each year. In 2007, Chrysler Canada became the second-highest-selling vehicle manufacturer in Canada, and in the same year it gained more market share and incremental sales than any other vehicle seller in the country. With sales revenues of $5 billion and manufacturing revenues of approximately $13 billion, Chrysler Canada is one of the largest companies in our country.
The current lack of credit availability in the Canadian market is having a dramatic impact, not only on Chrysler Canada but also on the Canadian economy in general. In July 2008, prior to the full onslaught of the global credit crisis, Chrysler Canada had experienced 23 consecutive months of year-over-year sales growth—an unprecedented event in the history of our company and unmatched by any of the major vehicle sellers in Canada we compete against.
Today, Chrysler dealers throughout the country have indicated that upwards of 20% of potential new car buyers are unable to secure financing to purchase a new vehicle. Furthermore, lease financing in the Canadian marketplace for many automotive manufacturers is currently not available. During the first six months of 2008, approximately 50% of Chrysler Canada's vehicle sales were leased, whereas today that number is zero.
Credit for our dealer organization is also under extreme pressure. At a time when the current Bank of Canada interest rate is at a historic low, dealers are experiencing unprecedented increases in the costs associated with “flooring” or financing their new vehicle inventory. Further, it is virtually impossible for a prospective Chrysler dealer to secure flooring, which in turn results in a drag on the country's economic activity, and it prevents a new dealer from the having the ability to enter into the business. It is also very difficult for a Chrysler dealer to secure a mortgage to construct a new facility or to finance an amalgamation with another dealer.
The availability of credit is critical for the return of the automotive industry and the Canadian economy to good health. Further, a more stable U.S. economy will also directly impact Chrysler's success. Chrysler Canada's operations are inextricably linked with Chrysler LLC and our United States operations. For example, 85% of the products manufactured by Chrysler Canada are exported to the United States, 60% of the products we sell in Canada are produced in the United States, and approximately 20% to 27% of Chrysler's worldwide production currently occurs in Canada. Therefore, in our opinion, it is unrealistic and, frankly, improper to examine Chrysler Canada's operation without consideration of the larger context in which we function.
With that said, I'd now like to pass this over to the president of Chrysler LLC and our vice-chairman, Mr. Tom LaSorda, who's going to speak to some of the critical factors for our ongoing competitiveness in Canada.