Nissan suppliers in worries on survival

Jan 15 2009 by Paul James, The Journal

INDIVIDUAL action plans will be drawn up to help Nissan’s suppliers in a bid to safeguard 2,500 jobs through the “unprecedented challenges” that lie ahead.

In the wake of the 1,200 job cuts announced at the car plant last week, 16 firms in the supply chain met development chiefs yesterday to warn of their fears about cash flow, empty order books and retaining skilled staff.

The Nissan Response Group will now hold individual meetings with each of the companies to highlight the specific help available from the public sector – including the new loan guarantees announced by the Government yesterday.

Business Minister Ian Pearson told The Journal that the package of measures, aimed at helping companies struggling to access finance, would definitely help the Nissan supply chain survive the downturn.

But business leaders warned all the Government’s efforts would be pointless if they did not unblock access to credit.

Speaking after meeting with the affected firms, Ian Williams, One North East director of business and industry, said the next year would pose unprecedented challenges to the car industry and the wider economy.

Mr Williams said: “A series of individual meetings with suppliers will take place over the next few days to put in place a plan of action for each company – pointing them to the specific public-sector support to tackle their specific needs.

“The welfare of Nissan’s supply chain is vitally important to the car manufacturer.

“Job Centre Plus, Learning and Skills Council, Business and Enterprise North East and One North East, with the support of private-sector partners, all made it clear at the meeting that they will make every effort to ensure that suppliers are given the best possible advice and support to tackle the problems they face.

“The next 12 months will present the automotive sector and wider UK economy with unprecedented challenges and we will be working with Nissan and its suppliers to ensure they emerge in the best shape possible to take advantage of the opportunities that will undoubtedly return when the economy begins to recover.”

Today will mark a week from Nissan’s announcement that 800 full-time and 400 temporary jobs were being axed at its Washington plant.

One North East would not name the firms with whom it met yesterday in a bid to prevent speculation about their futures – but it is known that some have relied almost entirely in the past on Nissan for orders.

Business leaders yesterday said it was vital that the new Government measures freed up credit.

Last night a North East Chamber of Commerce spokesman said: “Businesses must have access to credit and if they do not then all the Government efforts to date will be pointless. That said this is, of course, a very welcome step to free up those credit markets and we will be watching to see how the banks respond to this.”

The Federation of Small Businesses welcomed the announcements, but warned it was a last throw of the dice to unblock lending from banks to small and medium-sized enterprises.

Ian Pearson said: “Taken together this is a package that will help businesses of all shapes and sizes in the North East.

“I think it will definitely help in the Nissan supply chain, the scheme will help companies with a turnover of up to £25m and that has a lot of potential to support a range of companies there.

“This is not a blanket subsidy but it is real help targeting specific problems. We know there are difficult times ahead but as a Government we are putting in place measures that will make a real difference and directly support businesses in these troubled times.”