Mandelson set to make car industry aid announcement
A package of support for the UK's struggling car industry will be unveiled by Business Secretary Lord Mandelson today, Downing Street announced.
[catch the announcement on our Live Blog here > ]
The measures, which include both short- and long-term help, will be detailed in a statement to the House of Lords this afternoon.
Prime Minister Gordon Brown's spokesman denied the package was a "bail-out" but said it was vital to get a sector with "a strong future" through the immediate difficulties caused by the recession and on to a sound footing.
Lord Mandelson is setting out the assistance ahead of a crunch meeting tomorrow with industry representatives amid plummeting sales and mounting job losses. The package was discussed at a meeting of the Cabinet this morning.
The Prime Minister's spokesman said: "Lord Mandelson and the Department have been making clear that, in our view, the car industry is a sector with a strong future.
"So not only are we in a position to provide some support to help them get through this difficult period but also, and this will be a very important part of the announcement, this is about how we provide the right support for them in the future."
Asked if it would include a cash injection, he said: "This is not a bail-out."
But he made clear that it involved money set aside last year as part of the Government's anti-recession strategy.
"Provision was set aside at the Pre-Budget Report for a number of subsequent interventions and we will be allocating some of that provision.
"This is helping what the Government believes are fundamentally sound companies get through a difficult period."
Car and commercial vehicle production slumped by nearly half last month, official figures showed last week.
The number of cars made in December fell 47.5% compared with December 2007, while commercial vehicle (CV) production was down 56.7%.
The huge falls last month meant that car production for the whole of 2008 was 5.7% down on 2007, with CV production falling 5.9%.
Workers at the Birmingham factory which builds Jaguar cars began two weeks of non-production today in another sign of the impact the economic downturn is having on British industry.
The factory, which employs 2,000 workers in Castle Bromwich, assembles Jaguar XF, XJ and XK models and returned to production only last week after an extended Christmas break. The firm has also announced 450 job cuts because of the slump in car sales.
Warwickshire-based Aston Martin announced today that production staff would be working a three-day week.
Earlier, Birmingham van manufacturer LDV, called on the government to ‘turn talk into action’ in backing companies investing in skills, productivity and green technologies.
LDV said it wanted to see the government do more to accelerate the green market by stimulating consumer demand and putting in place the infrastructure to support it.
A spokesman said: “The government has talked a lot about backing the jobs of tomorrow. We are a company that is ‘doing all the right things’ investing heavily in skills, jobs and green technology.
“It is time for action today. The industry will be watching the Governments announcements closely.”
Car giant Honda has also announced it will halt production at its Swindon factory for a further two months.
The Japanese firm had already decided to stop production in February and March, but that will now be extended into April and May.
