Canadian Auto Workers president Ken Lewenza praised the announcement of a potential $3.3-billion lifeline to the country's car industry, but warned that it should hinge on promises by manufacturers to maintain jobs and keep plants open.

"The reason the CAW pushed for government involvement is because all governments are intervening in the economy and in particular the auto industry," Lewenza told CTV Newsnet Saturday.

"But we want to protect our existing investment and our existing facilities. So there has to be a condition of government intervening to support the existing facilities and keep them open."

Ontario NDP leader Howard Hampton said automakers should be providing both employment and product guarantees, if they are receiving government assistance.

"You need to get product guarantees, in other words, you want to be producing the cars and trucks of the future that people want to buy," he said during an appearance on CTV Newsnet on Saturday.

"And secondly, you need some job guarantees."

On Friday, Industry Minister Tony Clement announced the bailout package, which is a joint effort between the federal and Ontario governments.

Clement indicated during a news conference that manufacturers will have to prove they have plans for maintaining long-term viability in order to receive funds.

As well, the entire payout hinges on whether or not the United States approves its own proposed $14 billion bailout package.

Hampton said he felt the Canadian efforts appeared to be on the right track.

"My understanding is that the money that is being put out the door, or the money that is being offered, is conditional upon the proportion of auto sector jobs that are in Ontario and Canada now, staying in Ontario and Canada," he said.

"That's a fair start," Hampton added.

$70 per hour?

While some critics have suggested autoworkers are costing their industry too much and making wages of more than $70 per hour, the Detroit Three automakers each report paying an average hourly wage of less than $30 U.S. for their workers.

The contentious $70 figure, which has been applied to U.S. workers only, also factors in health care costs and benefits for retired employees.

Hampton said the overriding market conditions are to blame for auto industry's immediate financial challenges -- not labour costs.

"It's not workers' wages that have resulted in this calamity," he said.

"What's really happened is this: American consumers are so scared right now that they've stopped buying just about everything."

During a meeting with Chrysler executives on Friday, Lewenza said, company officials indicated that if market conditions change, they would be able to pay back government loans within two to three years.

According to Lewenza, auto manufacturers understand the importance of changing their business plans to include initiatives such as developing more environmentally friendly vehicles.

However, he said a shift in practices will "take some time."

The news of the Canadian bailout package came a day after the U.S. Senate voted down the proposed $14-billion American bailout, after the United Auto Workers refused to make wage cut concessions.

After the vote, the White House announced it may dip into the US$700-billion bank bailout fund to help the auto sector.

The haggling coincides with an announcement by General Motors that it will shut down nearly all production in its North American plants throughout the month of January.

The move will affect 21 factories and cut 250,000 cars from the company's first quarter production schedule.

GM's Oshawa, Ont., plant will shut down for six weeks beginning in January.