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Union chiefs call for £13bn fund to help motor industry

January 29th, 2009
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Trade union bosses have called for a £13 billion fund to be made available to provide interim relief for manufacturers, including vehicle producers, and to cover employment costs during the ongoing economic crisis.

The Government must also use its stake in the banks to free up credit for consumers to kick start car-buying demand again.

Derek Simpson, joint general secretary of Unite, was responding to yesterday’s (Tuesday, January 27) announcement by Business Secretary Lord Mandelson of a £2.3bn aid package to the industry.

He said: “Tinkering around the edges of intervention won’t achieve anything millions of jobs will still be lost and millions of pounds will be wasted.

“Car producers in the UK are hanging on by a thread because of a lack of credit from the banks and a dramatic fall off in demand for cars.  The UK car industry has, more than any other in Europe, been through two decades of punishing rationalisation bringing massive improvements in efficiency, productivity and profitability.

“This is no lame duck or smokestack industry. Everyone in the industry holds the strong belief that demand will pick up again in the near future and that producers, that are able to hold onto their workforce over the slump will be in a prime position to benefit from the recovery. 

“Other European governments are pouring huge sums of money into their domestic car industries in the hope of establishing a material advantage over counties whose governments take a free market approach. Germany and France have used similar measures over recent decades to protect industry and have enjoyed a much slower decline in manufacturing output and employment than the UK has during the same period.

“There is no evidence to support a view that half -hearted support for industry will have any success at all. So Unite is urging the government to learn the lessons of past failures to support manufacturing and begin a programme of emergency support for strategic industries of which car production is most certainly one.”

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