Ministers 'ready to help' car industry

Dec 9 2008 by William Green, The Journal

MINISTERS are on standby to provide more support to Nissan and the British car industry amid mounting fears of huge job losses.

Thousands of North East jobs depend on the Japanese company’s plant in Washington, but production is being cut back after a 40% fall in sales in a year.

Talks are already under way between the Government and Nissan about extra training for staff to make best use of time when production is suspended and keep them in jobs.

About 400 temporary Nissan workers could be laid off in the new year and 160 jobs could go at a North East supplier because of the production cutbacks.

Hundreds of jobs at other regional suppliers could also be at risk, while about 500 staff are threatened after Birmingham car parts company Wagon collapsed.

But No 10 yesterday said it stood ready to help the industry where “appropriate” amid fears an unprecedented sales slump could worsen and spark thousands of job losses.

It came as the Society of Motor Manufacturers and Traders won widespread support in calling for industry-wide tax relief as well as rises in vehicle excise duty and a “showroom” tax on new cars to be axed.

It also called for the finance arms of car firms to be allowed access to the funds put aside for cash-strapped banks.

Representatives insisted the package was unlike a planned US bailout of its automotive industry, but declined to put a price tag on its proposals.

The Prime Minister’s official spokesman said: “[Business Secretary] Peter Mandelson has met representatives of the car industry recently. They put forward a number of proposals. The Government is studying these proposals and stands ready to assist the industry as appropriate.”

A group of about 15 car industry bosses were at the meeting, including Trevor Mann, Nissan’s senior vice-president for Europe, manufacturing.

Blaydon MP Dave Anderson said Nissan was important to the region economically and symbolically, in terms of the North East leading the world in manufacturing.

Welcoming Downing Street’s comments, the Labour MP said: “It is good news and we are very keen to make sure that we do everything right across Government to support Nissan and their suppliers.”

Unite union regional officer Dave Telford, who deals with Nissan, said: “There is an enormous risk of job losses if nothing happens. Nissan is key to employment in this region, not only in direct employment, but with thousands in the supply chain. So, any assistance that could be provided to that industry would be most welcome.”

AA president Edmund King said: “We are not talking about a British Leyland bail-out of the 70s or 80s.

“What we are talking about here is short-term help to actually ensure that credible and in normal times profitable companies keep going and don’t go to the wall.

“In terms of doing that, they do need short-term loans and access to liquidity in the way banks have been given and helped there.”

He said hundreds of thousands of people worked in the UK car industry, from assembling parts to cars, to people delivering vehicles and working in showrooms.

Mr King said: “If there is no Government support given, there will be thousands of job losses across the industry.”

Page 2: Mounting pressure on manufacturers