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Car makers give ministers warning Car makers give ministers warning
(about 2 hours later)
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. Ministers have been warned that tens of thousands of jobs could be lost without more help for the motor industry.
Union leaders told ministers that although a £2.3bn loan guarantee package was a welcome start, more needed to be done. Union leaders told them that although a £2.3bn loan guarantee package was a welcome start, more needed to be done.
Tony Woodley, joint leader of Unite, said immediate financial support was needed to keep workers in jobs.Tony Woodley, joint leader of Unite, said immediate financial support was needed to keep workers in jobs.
Business Secretary Lord Mandelson hosted a summit in central London. Business Secretary Lord Mandelson said the meeting with the industry had been "useful" and work to help car buyers get access to credit had begun.
Three-day weekThree-day week
In a statement released after the meeting, he said the package of loan guarantees had been "welcomed by the manufacturers we met" and they had discussed how car makers and and suppliers could access them.
"There was also agreement at today's meeting to take forward work to improve car company financing arms' access to funding," he said.
He said his department had "already opened exploratory discussions with banks" and there would be more meetings on the issue with manufacturers this week.
We need an immediate cash injection Tony Woodley, Unite Parts firm announces job cuts
"I am confident that the actions we and the automotive industry will now be taking together will help the industry build the bridge to a greener future for the auto sector," Lord Mandelson said.
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.
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.
We need an immediate cash injection Tony Woodley, Unite class="" href="/1/hi/business/7855197.stm">Parts firm announces job cuts 'Positive steps'
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. Luxury sports car firm Aston Martin became the latest manufacturer to cut production, with workers at its factory at Gaydon, Warwickshire, starting a three-day week.
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.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.
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. Mr Woodley said as he left Wednesday's meeting, at the Department for Business, Enterprise and Regulatory Reform (BERR), that tens of thousands of jobs were now at risk because of the "collapse" in car sales.
In order to get things moving, cars have got to be sold, they have got to get out of the showrooms, and the prospective buyers that are left are unable to get credit to buy cars Russell LuckockA E Harris
He pressed Lord Mandelson to offer immediate financial support and said more should be done to help access credit to encourage car sales.He pressed Lord Mandelson to offer immediate financial support and said more should be done to help access credit to encourage car sales.
'More to do' Mr Woodley said: "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.
Mr Woodley said: "These are the big issues now. The government has listened intently to what we said.
"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.
"The message is 'well done - but there is much more to do'.""The message is 'well done - but there is much more to do'."
Business Minister Pat McFadden said: "We understand the importance of the car industry and we want to do everything we can to help. Paul Everitt, head of the Society of Motor Manufacturers and Traders, said the meeting had been "serious and constructive" and welcomed the "positive steps taken by the government".
"We also have to remember the importance of the supply companies which have factories around the country." He added: "As an industry we emphasised the lack of specific proposals to stimulate demand in the market and ease consumer credit but have agreed to meet officials later this week to discuss technical issues holding up the ability of vehicle financing arms to get access to Bank of England funding."
Tom Purves, chief executive of BMW, described the meeting as "very constructive", adding: "We are all working in the same direction. He said it was difficult to estimate how many jobs could be lost in the coming weeks in the car industry but said there was a "clear risk" that further redundancies will be announced.
"We have seen an unprecedented drop in demand and the government understands that." Mr Everitt said industry officials pressed the case for a so-called "scrappage" scheme, similar to ones introduced in Germany, under which drivers are offered money to exchange older, polluting vehicles for new, cleaner models.
Tom Purves, chief executive of BMW, described the meeting as "very constructive", adding: "We have seen an unprecedented drop in demand and the government understands that."
Asked about the government package, he replied: "No-one can say whether it's enough or not enough.Asked about the government package, he replied: "No-one can say whether it's enough or not enough.
"The conversations we had about taking elements of the package on over the next two weeks has been very beneficial. "The conversations we had about taking elements of the package on over the next two weeks has been very beneficial."
"I agree we need to take action quickly - the government understands that." Russell Luckock, chairman of A E Harris, which supplies the car industry with components, told the BBC the problem was people who wanted to buy cars could not get credit.
"In order to get things moving, cars have got to be sold, they have got to get out of the showrooms, and the prospective buyers that are left are unable to get credit to buy cars. Until the government can do something there, then the log jam will stay jammed."
At prime minister's questions Gordon Brown said he believed the car industry had a "strong future" and added the government was discussing training grants to "help those people in jobs at the moment keep their job".