Tuesday 27th January 2009

Government Support for Car Industry

Mandelson thinks loans are the answer

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Lords heard plan to save industry

This afternoon Business Secretary Lord Mandleson gave the House of Lords details of a support package for the troubled UK car industry.

The package, thought to be worth up to £2.3bn, provides access and guarantees to loans that will ease financial pressure as the global economic slowdown creates difficult conditions for car manufacture and sales.

Part of the deal will see a scheme making £1.3bn worth of European loans available to car manufacturers and larger suppliers. The sector will also get £1bn of loans guaranteed by the state.

Mr Mandelson made it clear that this assistance was being given on the basis that the automotive industry will use it to innovate and change, rather than simply to prop up existing structures.

'Today's measures will provide a specific boost to the industry, providing real help and laying the foundations of its reinvention for a low carbon future.'

In the Upper House, Lord Hunt of Wirral said the package was too little, too late. He told peers: 'after years of persecuting the motorist, ministers now offer a range of placebos to an industry facing the worst crisis it has ever faced'.

[cqueen]

So I can get a loan for a new car off the gov?

Works for me!


EDIT: no wait, did i get that wrong?

Edited by cqueen on Tuesday 27th January 17:43

[TVR-Boy]

What's the point if nobody is buying new cars? As bad as it seems (especially for the workers), it makes sense to shut down factories which aren't making cars due to a lack of orders.

[pistonlager]

So does this mean Tata will get J/LR for free. If they borrow enough.

[whit3star]

[quote]In the Upper House, Lord Hunt of Wirral said the package was too little, too late. He told peers: 'after years of persecuting the motorist, ministers now offer a range of placebos to an industry facing the worst crisis it has ever faced'.
[/quote]

The automotive industry is only going to be helped if people buy cars I know it's stating the obvious but if the government is 'serious' about helping the industry, Reducing/abolishing VAT on new cars would have a much bigger impact IMO

[vauxhallloving]

Loans arnt the answer, stop taxing the living day lights out of the motorist then maybe they wont need loans to buy a new car. These stupid CO2 emmisions on car tax are enough to stop me buying a new car. My P reg 2.0 Astra cost me £185 a year to tax, if it was a new Astra 2.0 Im guessing it would be nearer the £250 mark, and with this rip off "Road Pricing" on the way who on earth is going to buy a new car if in a few years they wont be able to afford it. These idiots want cars off the road, so if they want that, then they arnt going to be selling many new cars are they! Get f##ked Labour, you've failed yet again!!!!! RANT OVER FOR NOW!

[infradig]

Mandelson's a . (clue: rhymes with His Lordship from the Wirral).

Let's face it,this goverment will not do anything to help the motor industry. They've been trying to get us all off the road for years,if there's no motor trade to encourage us..job done!

[pete0810]

So why loan money to someone like Tata if they can afford to sponsor Ferrari F1 to the tune of how many millions? It's the consumers who can't afford to build the cars not the car companies who can't afford to build the cars, Mandy! Wonder if somewhere down the line a car exec's gonna help Mandy with his mortgage!!

[Adrian W]

Someone explane to me why we need new cars, the real problem must be that cars and car ownership have reached saturation point, it's not like the 60's when you flogged your Anglia before it starting dessolving.

In a consumer society they now last too long.

[exocet ape]

Thank god i'm not the only one who see's this as giving out money for no reason.

What British car manufacturer is going to benefit from this? None by any chance?
Do they think this will all of a sudden get people flocking in to the car showrooms? eh no.
Will the people who are in the market benefit in any way from this? Eh, no again!

I think it's TATA to £2BN of TPM!!

[The Hypno-Toad]

He's been on the radio just now justifing this, saying that the money will be spent on building green cars for the future. Right Mandy, because it won't take at least three years to design, test, develop and market any new model let alone one which will use 'the new revolutionary low emission engines' that Mandy says this funding is there to support. And lets face it, Jaguars and Land Rovers principal market is for cars for the people isn't it? And sales of electric cars aren't decreasing are they? And Hydrogen is just around corner isn't it? And could the company that would appear to be getting all this cash be owned by one of his mates? Well gosh yes.

Well what about Vauxhall? Well if GM goes belly up then all our lovely money could find its way into the pockets of whoever buys them in the fire sale. And I'm guessing that whoever does that won't be UK owned.

Is the Transit factory going to get any of this money? What about all the suppliers who make the steering racks, trims etc? Honda? Nissan? Lotus?

From what I have seen so far (and I'll admit I haven't seen the small print.) this is going to make sure that his buddy doesn't lose out on his investment and has nothing to do with keeping the UK motor industry functioning. Not when every disused airport in the country is one giant car park full of stock they can't sell.

Here's an idea. Why instead of loaning people money which we might never get back as it might end up out of the country, do we not spend money? Why not have every government department (police, ambulance, fire brigade etc etc.) go out and replace all their vehicles with new ones bought from the stock that is sitting in airports? Then the manufacturers will get some money back, it would free up production and take a huge burden off their back.

Oh I know why. Because if we loan them money and dress it up in a load of "This is to help them go green bks," then Joe Public won't be able to see how its been spent or where its going.

Mandy is the slimest little scumbag ever to crop up in government.

[Adrian W]

I just re read this, why only larger suppliers? don't small UK owned ones matter?

[The Dude]

The irony of a government hell-bent on taxing the average motorist off the road, now promising financial aid to the very industry it's been kicking in the bks for the last few years is hilarious.

Even funnier is that the so-called green taxes they've stolen from us under false pretences will be going to fund this PR exercise.

fk off, go on just fk off.

[FactoryPilot]

This country has been run into the ground by this Government, and this is just pouring more petrol onto the inferno. If it is all down to the world economy, then how come the pound is getting such a kick-in against every other currency. The Euro is almost equal, the Dollar at 140 ish and the pound is at its lowest against the yen since 1971. If we were all in the same boat, then the pound would not be dropping against every other currency.

So, b0110cks to this world economy thing, it just goes to show what a f*ck up they have made in the UK. And in my opinion this is just making it even worse.

[FlyInMySoup]

It always surprises me that so many of you posting on a car enthusiasts website are so anti support for the car industry. One of the arguments often repeated here is that they are not 'British' so why should we support them? Well, if they are publically listed on any of the big stock exchanges they are not really of any country, they are global, in fact you could buy one share in Ford which would then make them a bit British, which could already be the case as your pension, savings etc may be indirectly invested in them. Also, they pay corporation tax and employers NIC in this country, their employees pay tax in this country, the supply chain is predominantly British based, companies like GKN for example, who also pay tax.... there is a lot to lose if this industry is wiped out in the UK. We will buy cars again, there will be an upturn in car sales whether it's in 6 months or 3 years and when that happens it won't be the UK that benefits from tax revenue when you buy a new car, but another country.

[had enuff]

with the fields full to bursting with new cars all emission freindly etc sell them off cheap good way of getting the old stuff off the roads keeps the greenys happy put money back keeps things moving seems easy but no just let them sit there and rot waste money proping up something else why don,t these idiots think when all around can

[Rob P]

Idiots, fecking idiots. Does not solve the problem, just puts off the inevitable. What happens in 12 months when people still are not buying cars?

Why not abolish VAT on "green" cars, say less than 120g/km and scale it in gradually up to the higher emissions cars? That would keep the greens happy and stimulate some buying..

[Pickled Piper]

Th Government is giving the money to the car firms. If you listen to Mandelsons speech he made it very clear this was not a bail out. The Government is simply guaranteeing the loans that the car firms may choose to borrow. If the firm car firm defaults, when the Government will have to cover the payment. Most companies need to continually borrow money in order to keep operating. It's a wise move and will stop firms from collapsing. It's a smart move as it leaves the onus on the firms to sort themselves out.

The next move is to get people buying new cars. The only way this is going to happen is to make credit available to the consumer and also to offer some protection to the consumer against redundancy. This may well be built in to the credit agreements.

pp

[carmats]

vauxhallloving said:

Loans arnt the answer, stop taxing the living day lights out of the motorist then maybe they wont need loans to buy a new car. These stupid CO2 emmisions on car tax are enough to stop me buying a new car. My P reg 2.0 Astra cost me £185 a year to tax, if it was a new Astra 2.0 Im guessing it would be nearer the £250 mark, and with this rip off "Road Pricing" on the way who on earth is going to buy a new car if in a few years they wont be able to afford it. These idiots want cars off the road, so if they want that, then they arnt going to be selling many new cars are they! Get f##ked Labour, you've failed yet again!!!!! RANT OVER FOR NOW!

couldnt have put it better myself.

[mrk4thom]

FlyInMySoup said:

It always surprises me that so many of you posting on a car enthusiasts website are so anti support for the car industry. One of the arguments often repeated here is that they are not 'British' so why should we support them? Well, if they are publically listed on any of the big stock exchanges they are not really of any country, they are global, in fact you could buy one share in Ford which would then make them a bit British, which could already be the case as your pension, savings etc may be indirectly invested in them. Also, they pay corporation tax and employers NIC in this country, their employees pay tax in this country, the supply chain is predominantly British based, companies like GKN for example, who also pay tax.... there is a lot to lose if this industry is wiped out in the UK. We will buy cars again, there will be an upturn in car sales whether it's in 6 months or 3 years and when that happens it won't be the UK that benefits from tax revenue when you buy a new car, but another country.

I agree with you the whole supply chain and the factory operation pay tax to UK coffers, it just ultimately they are subsiduaries of non british companies and therefore benefit at the expense of the UK tax payer. I know its spliting hairs. What bugs me more though is that the UK tax payer is going to help companies like TATA (JLR) to develop green technologies which it can then use all around the world helping other non-UK TATA (JLR) operations make more money.

I think it might have been better to broaden the remit of R&D tax credits or other innovation based grants to benefit the supply chain. Helping them develop technologies which they could retain the IP on and sell to the rest of the world, while the pound is weak. Perhaps I'm talking out of my hat, maybe this already happens.

[cqueen]

Hmm I don't see a fix to this.

I don't see the point in just giving them money to build more cars that no one can buy. But then how do you let tens of thousands go without jobs?

Tough call, but rest assured whatever happens people will blame Brown.