Government to protect Nissan jobs

Dec 18 2008 by William Green, The Journal

THE Government last night pledged to step in if they feared Nissan was turning into the next Woolworths.

Business Minister Ian Pearson said action would be taken in “exceptional” circumstances to protect thousands of jobs at the Washington car plant and thousands more in the supply chain.

Mr Pearson admitted there was a risk of more “big household” names collapsing like high street chains Woolworths and MFI.

The Journal last week revealed ministers were considering a support package for the UK car industry battered by a sales slump, with Nissan experiencing a 40% drop in a year.

The company has dramatically cut back production, leading to workers at its Washington plant being unexpectedly sent home last week as lines were shut down. Work will resume on Monday.

Around 3,500 people work at the factory, with thousands more employed in the supply chain across the region – although there are fears of job losses across the board if sales continue to fall.

Nationally, around 850,000 are employed in the car industry that generates £51bn for the economy a year. Automotive bosses have called for access to short-term loans and guarantee borrowing to see them through the recession.

And the pressure yesterday intensified as Labour MPs used a Westminster debate to warn the Government of impending disaster in the car industry if action is not taken quickly.

They contrasted the hundreds of millions of pounds being spent in other European countries to support their automotive companies.

Richard Burden, Labour MP for Birmingham Northfield, warned of a “spiral of problems” as production cuts by car manufacturers hit the supply chain, saying: “If we start to lose the critical mass of our automotive industry in the UK, it will not come back. It won’t be there to come back when the upturn occurs.

“The UK automotive industry is just too important to allow to become fatally damaged in this downturn and action is now needed to prevent that.”

Mr Pearson said action was being taken to support the supply chain and discussions with car manufacturers continued after they met him and Business Secretary Lord Mandelson last month.

He said: “We have seen the collapse of big household names like Woolworths and MFI and clearly we cannot rule out other companies being at risk.

“It is one of the reasons why we need to continue to have dialogue.

“But I want to stress that any Government support that would be provided would be regarded as exceptional.

“These are exceptional times and we have to contemplate having to do exceptional things.

“Loans from Government should also be seen as very much a last resort. In the first instance we should be looking to companies and their parents to provide the funds, which are required for the future.

“We should look to companies to restructure, but there is a case in certain instances where we possibly need to go further. That’s why we continue to have dialogue as appropriate with companies during these difficult times.”

Last night, the Society of Motor Manufacturers and Traders (SMMT) said: “We are encouraged that the Government is recognising the significance of the industry and that it is being debated at such a high level is encouraging as regard to the package of support we have requested.”

Click here for more stories on the Nissan crisis.

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