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Ministers pressed over car credit Car worker subsidies 'considered'
(about 3 hours later)
Ministers have been urged to help car buyers' get access to loan finance, at a meeting with the motor industry. The government is considering giving car firms a "wage subsidy" to encourage them to put workers on shorter hours rather than making them redundant.
Unite boss Tony Woodley warned at the meeting that without more help, tens of thousands of jobs could be lost. Business Secretary Lord Mandelson faced the call from the Unite union's Tony Woodley at a motor industry summit .
Paul Everitt, of industry body SMMT, welcomed a £2.3bn loan guarantee scheme but stressed the lack of specific proposals to ease consumer credit. The Department for Business, Enterprise and Regulatory Reform said it would consider the plan but firms had to come back with fully costed proposals.
Business Secretary Lord Mandelson said work to boost credit had begun and more meetings would take place this week. It also said talks had begun with banks to boost availability of car loans.
The firms at the gathering of motor industry representatives welcomed a £2.3bn loan guarantee scheme announced on Tuesday, but pressed for specific proposals to ease consumer credit.
Speedy access to credit, speedy access for our finance arms so we can encourage more purchase of cars - these are the big issues now Tony Woodley Parts firm announces job cuts
Leaving the meeting at the Department for Business, Enterprise and Regulatory Reform (BERR) on Wednesday, Tony Woodley, Unite's joint general secretary, said without more help tens of thousands of jobs could be lost because of the "collapse" in car sales.
And he told the BBC: "We asked the government to look at immediate financial support for short-time working. If we can do something along those lines to maintain the skills, that's the best way forward.
"But speedy access to credit, speedy access for our finance arms so we can encourage more purchase of cars - these are the big issues now."
Three-day weekThree-day week
In a statement released after the meeting, Lord Mandelson 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.
'Positive steps' 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
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.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.
In a statement released after Wednesday's meeting, Lord Mandelson 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.
'Positive steps'
He said his department had "already opened exploratory discussions with banks" and there would be more meetings on the issue with manufacturers this week.
"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.
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 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. Paul Everitt, head of the Society of Motor Manufacturers and Traders, welcomed the "positive steps taken by the government".
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.
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.
"The message is 'well done - but there is much more to do'."
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".
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."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."
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. Mr Everitt said industry officials pressed the case for a "scrappage" scheme under which drivers are offered money to exchange older, polluting vehicles for new, cleaner models.
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". Asked about the government package, he replied: "No-one can say whether it's enough or not enough.
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.
"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."
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.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.""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".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".