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Mandelson holding motor summit Car makers give ministers warning
(about 3 hours later)
Business Secretary Lord Mandelson is meeting car makers and unions in a bid to persuade them that a £2.3bn scheme for the motor industry will work. The government has been warned that tens of thousands of car workers' jobs could be lost unless it gives more help to the motor industry.
The UK's biggest union called the help package a "massive disappointment", while one van-making firm said it deserved "six out of 10". Union leaders told ministers that although a £2.3bn loan guarantee package was a welcome start, more needed to be done.
The scheme includes unlocking £1.3bn of EU loans and ministers guaranteeing up to £1bn of further loans. Tony Woodley, joint leader of Unite, said immediate financial support was needed to keep workers in jobs.
Lord Mandelson said it would give troubled manufacturers a boost. Business Secretary Lord Mandelson hosted a summit in central London.
Shutdowns Three-day week
The meeting is taking place at the Department for Business, Enterprise and Regulatory Reform in central London.
Car sales are falling amid a worsening economic climate, with unions warning of a jobs "catastrophe" if the measures do not have an impact soon.Car sales are falling amid a worsening economic climate, with unions warning of a jobs "catastrophe" if the measures do not have an impact soon.
Several plants are on extended shutdowns, with firms including Honda, Nissan and Jaguar Land Rover among those affected.Several plants are on extended shutdowns, with firms including Honda, Nissan and Jaguar Land Rover among those affected.
This is a fraction of the support being given by almost every other government in Europe Tony Woodley, Unite Parts firm announces job cuts
Engineering group GKN, which supplies parts to car makers including Land Rover and Ford, announced on Wednesday that it had cut 242 UK jobs since October and may have to shed more.Engineering group GKN, which supplies parts to car makers including Land Rover and Ford, announced on Wednesday that it had cut 242 UK jobs since October and may have to shed more.
The government announced on Tuesday that it would offer loans of up to £1.3bn from the European Investment Bank and guarantees of support of up to a further £1bn for lending. We need an immediate cash injection Tony Woodley, Unite class="" href="/1/hi/business/7855197.stm">Parts firm announces job cuts
Bids will be assessed on a case-by-case basis, but Lord Mandelson made it clear it was not offering a subsidy or "blank cheque". Luxury sports car firm Aston Martin became the latest manufacturer has also cut production, with workers at its factory at Gaydon, Warwickshire, starting a three-day week.
Unite, the UK's biggest union, has called for aid worth up to £13bn for manufacturing, including car companies. The government announced on Tuesday that it would offer car makers loans of up to £1.3bn from the European Investment Bank and guarantees of support of up to a further £1bn for lending.
Joint leader Tony Woodley said: "Two billion pounds sounds like a lot of money but at least half of this will be taken up by Vauxhall and Jaguar Land Rover alone, leaving little or nothing for the hundreds of component companies. Mr Woodley said as he left the meeting, at the Department for Business, Enterprise and Regulatory Reform, that tens of thousands of jobs were now at risk because of the "collapse" in car sales.
"This is a fraction of the support being given by almost every other government in Europe." He pressed Lord Mandelson to offer immediate financial support and said more should be done to help access credit to encourage car sales.
'Unclear' 'More to do'
He said the government should double the money it had announced. Mr Woodley said: "These are the big issues now. The government has listened intently to what we said.
Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders, said he looked forward to discussing the substance of the announcement with Lord Mandelson. "We have made it clear that yesterday's announcement was a good start but it will not in itself be quick enough to offset potentially tens of thousands of job losses. We need an immediate cash injection.
Richard Lambert, director-general of the Confederation of British Industry, said: "It is unclear how quickly any new funding will be made available or how many hoops car-makers might need to jump through to become eligible." "The message is 'well done - but there is much more to do'."
A spokesman for van builder LDV said: "We give it six out of 10. We welcome the government's focus on the development of green technologies and low-carbon vehicles, areas that LDV is leading on. Business Minister Pat McFadden said: "We understand the importance of the car industry and we want to do everything we can to help.
"However the statement is detail-light and there is no mention of how government can help stimulate demand for those vehicles and create the infrastructure to support it." "We also have to remember the importance of the supply companies which have factories around the country."
'Not a lame duck' Tom Purves, chief executive of BMW, described the meeting as "very constructive", adding: "We are all working in the same direction.
In his statement, Lord Mandelson announced plans to "reinvent" the industry for a greener, low-carbon future. "We have seen an unprecedented drop in demand and the government understands that."
He added that spending on skills training for employees would be boosted to £100m from its current £65m, if manufacturers demanded it. Asked about the government package, he replied: "No-one can say whether it's enough or not enough.
He said: "This industry is not a lame duck and I am not proposing a bail-out. It has been transformed over the past decade. Productivity has risen, catching up and overtaking both France and Sweden. "The conversations we had about taking elements of the package on over the next two weeks has been very beneficial.
"In Britain, we have some of the world's most productive car plants. For the future, Britain needs an economy with less financial engineering and more real engineering. The car industry can and should be a vibrant part of that future." "I agree we need to take action quickly - the government understands that."
But the Conservatives called the measures "pretty small beer", while the Liberal Democrats said they contained "worthy crumbs of comfort".