Government considers subsidy for carmakers

The Government is considering giving car manufacturers a subsidy to help cover the wages of workers whose hours have been cut over the past few months. It follows a meeting between business secretary Lord Mandelson and industry representatives today (January 28) urging the Government to help ailing car makers bring in a shorter working week rather than laying off staff.

According to trade union Unite, the idea has not been ruled out and the Department for Business, Enterprise and Regulatory Reform says firms need to come back to them with fully costed proposals.

Lord Mandelson had called the meeting to discuss the Government’s £2.3bn loan guarantee scheme announced yesterday (January 27), but industry representatives took the opportunity to press for specific proposals to ease consumer credit warning that without more help, tens of thousands of jobs could be lost.

Car sales are falling amid the economic downturn, with unions warning of a jobs catastrophe if the measures do not have an impact soon.

Several plants are on extended shutdowns, with firms including Honda, Nissan and Jaguar-Land Rover among those affected.

“I am confident that the actions we and the automotive industry will now be taking together will help the industry build the bridge to a greener future for the auto sector,” Lord Mandelson said.

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