The UK government is mulling a financial aid package for the country's car industry, according to reports in the media.
As the threat of job losses looms over the industry's 800,000 employees, business secretary Lord Mandelson is reported to be outlining plans to make loan guarantees available to the finance divisions of UJ car companies. He was reported to be considering granting low-cost loans to the UK auto industry, that would be funded by the £400 billion budgeted for supporting the banking industry.
The industry players fear the worst if Christmas were to arrive before its financial aid. The GMB trade union was reported to have said that around 25 per cent of "all car-making jobs" could go as a result of the economic downturn, with a spokesman being quoted as saying that this was the worst time for the industry till now.
In a report, the Observer newspaper quoted Britain's Unite trade union's joint general secretary Tony Woodley as saying that up to 40,000 car industry jobs could go in the next four weeks, unless the government intervenes.
Last week, Lord Mandelson held fresh talks with Ratan Tata, the head of the Tata Group which owns Jaguar and Land Rover and met executives from Vauxhall.
Reports quoted a spokesman for the Department for Business as saying that the government is "monitoring" the situation, and that ministers have said that they want to do "all they sensibly can" to help viable business. The British auto industry supports over 200,000 manufacturing jobs, and another 580,000 workers in allied areas such as sales, servicing and refuelling, according to the UK Society of Motor Manufacturers and Traders.
Reports suggested that aid for the British auto industry could be delayed till the dust settles over the bailout of the Big Three American car companies in the US, General Motors, Ford and Chrysler. The US senate has rejected a $14 billion interim bailout package for the trio, and now the outgoing Bush administration is spending a weekend trying to find a solution that will keep GM and Chrysler afloat till the incoming Obama administration takes office in January, and decides on the further course of action.