The federal government says it wants to protect consumers and parts suppliers faced with a potential bankruptcy filing by General Motors of Canada or Chrysler Canada by backstopping their warranties on new car sales and bolstering support for the parts makers, The Globe and Mail reported. Worried that the companies' financial crisis will drive away customers and seal their fate, Industry Minister Tony Clement said Ottawa would insure the warranties of new GM and Chrysler vehicles sold between yesterday and the conclusion of their restructuring efforts.

Grupo Mexico SAB, Mexico’s largest mining company, was ordered by a U.S. judge to pay Asarco LLC about $6 billion in damages over a lawsuit related to Asarco’s bankruptcy case, Bloomberg reported. U.S. District Judge Andrew Hanen in Brownsville, Texas, yesterday ruled that Grupo Mexico must return Asarco’s 30 percent stake in Peruvian copper miner Southern Copper Corp. and pay $1.9 billion in related dividends and interest. Hanen found Aug. 30 that Grupo Mexico’s Americas Mining Corp. unit harmed Asarco creditors by stripping the company’s stake in Southern Copper.

There are many small tragedies within a global disaster like this, the Business Spectator reported, and one of them is Ventracor--for years one of Australia’s leading biotech prospects. Two weeks ago, Ventracor went into voluntary administration and is now, amazingly, facing complete closure. It has no debt and a technology that works: 400 people are walking around in the United States with its artificial heart whirring in their chests.

Honda Motor Co. said it will cut North American production further, reduce pay of its salaried employees in North America, and for the first time, force its hourly workers to take unpaid leave, as vehicle sales continue to plunge, The Wall Street Journal reported. The company will reduce output by 62,000 units over three months starting May 1, according to a Honda spokesman. Honda reduced cut production in North America by 204,000 units, bringing its unofficial total output 1.25 million in the fiscal year ending today.

Troubled retailer Comercial Mexicana is due to file a third restructuring plan this week in a fresh bid to keep creditors at bay as talks to restore its financial health drag on. A source close to the negotiations told Reuters on Tuesday that the company, known as Comerci, and its creditors are getting closer to finding a way to restructure its heavy debt load. Comerci defaulted in October after massive derivatives losses sent its debt soaring above $2 billion.

How does Air Canada avoid CCAA? the Globe and Mail asks in an editorial that explores the replacement of president and CEO Montie Brewer with former Air Canada executive Calin Rovinescu. The airline says it can draw more equity out of its fleet by refinancing the planes. There are in fact new agreements in place to do just that. There's also talk of the government changing the pension rules and giving companies more breathing room. Most airline watchers seem to think that these and other factors mean Air Canada won't ask a judge for creditor protection. Don't believe it.

Ottawa has set the stage for a clash between General Motors of Canada Ltd. and its union, after the federal government demanded more concessions from GM workers in return for up to $7.5-billion in restructuring assistance and the Canadian Auto Workers refused, The Globe and Mail reported.

Japan's economy, the second-largest in the world, is shrinking at the fastest pace in more than 30 years, roughly twice as fast as the U.S. economy, The Washington Post reported. Exports and imports declined in February at a record rate, with monthly sales to the United States down nearly 60 percent compared with last year. Tokyo is giving itself public-works medicine for these global trade ills, deploying legions of men and women with flags and hard hats to repave streets, repaint crosswalks and fix broken clocks in city parks.

Chancellor Angela Merkel of Germany, an avowed friend of the United States and the leader of the European Union’s biggest economy, is diplomatic about the coming visit by President Obama. But she is clear that she is not about to give ground on new stimulus spending, stressing the need to maintain fiscal discipline even as she professes to want to work closely with the new American president. “International policy is, for all the friendship and commonality, always also about representing the interests of one’s own country,” Mrs.

Lawyers say debtor-in-possession financing (DIP)--the backbone of formal restructuring proceedings under the Companies' Creditors Arrangement Act (CCAA)--is difficult to obtain, partly because financial institutions accustomed to providing such facilities face their own financial troubles, the Financial Post reported. Since the 1990s, CCAA filings have been the preferred legal avenue by which companies such as Eaton's, Air Canada, Stelco and Abitibi bought time necessary to continue operations while they restructured. That's changing.