After weeks of appealing, the car industry has received the promise of financial support from the government. Business Secretary Lord Mandelson has outlined the basic plan for the support package for the UK car Industry that could potentially be worth £2.3 billion.
Although the news has been well received by the automotive industry, there are still serious problems with production dropping almost 49% in the last year in some companies. The loans are designed to boost the industry with many major manufacturers struggling in the financial climate and are available to protect jobs for manufacturers such as Nissan and Honda. The loans are only secured upto £13 billion with a further £1 billion available for environmentally friendly cars.
Nissan alone could have to lose a quarter of their workforce based in the UK to maintain a viable company. Honda has recently been shut down for 4 months despite the announcement but there is still little hope for those who have already been made redundant, with unemployment rising daily as many companies announce mass redundancies. Unemployed people are being forced to rely on the job centre and online recruitment agencies for support in finding work. The question still remains over whether these loans will have the impact the government hopes for.