UK Government Guarantees Up To £2.3 Billion For Car Industry

It has been reported that the weak economy knows no borders, rampaging across the globe entailing its toll in lost jobs and bankruptcies. The car industry in specific is no stranger to this strife, and some might say Great Britain's carmakers the majority, in view of their rocky history. Today UK Business Secretary Lord Mandelson declared the government will provide UK loans adding up to £1.3 billion with another £1 billion in assurance to the struggling industry £2.3 billion, or $3.25 billion in total.

However, far from a bailout and coming up greatly fall of the $17.4 billion already guaranteed to U.S. carmakers, the UK loans package will be directed at assisting UK car manufacturing benefits stay afloat, preserving jobs for Britain's industrial sector.

According to Tony Woodley, joint leader of Unite, the union that represents the UK's autoworkers, union officials think the UK loan funds are insufficient to resolute the flood of lost jobs, however, indicated by The Telegraph. "Two billion pounds sounds like loads of money but at least half of this will be entailed by Vauxhall and Jaguar Land Rover alone, leaving little or nothing for the hundreds of component companies. This is a fraction of the assistance being provided by almost every other government in Europe."

Lord Mandelson agrees that more must be finished to protect the ailing car industry, but sees it as part of an overarching scheme to support the British economy weather the global downturn.

Protecting automotive jobs in the near term will be an important aspect in keeping Britain's economy afloat, however, as the car industry employs about 1 million people in the UK by Lord Mandelson's count.

"We are required to oppose this in order to prevent a permanent loss of capacity, skills and technology," he said. "The health of the automotive industry is really significant to the strength of manufacturing in Britain and is at the heart of several of our regional economies."

However, there is as yet no structure or time line for allocating the funds and the fine print of the loan promise makes the funding dependent on the delivery of EU monies. The UK loan plan, thus, is at this point little more than a proposal and only time will tell what the final way out looks like.

News Categories