Page last updated at 17:46 GMT, Wednesday, 17 December 2008

Car industry focusing on crisis

Jaguar Land Rover factory in Solihull
The region has seven of the UK's largest car component makers

Manufacturers have called for immediate government funding to prevent job cuts affecting up to 90,000 staff in the West Midlands' motor industry.

About 70 car component firms met earlier at a suppliers forum held at the Birmingham Chamber of Commerce.

They called on the government to support their three-day working week to help them avoid making redundancies.

The crisis was debated in parliament earlier and MPs suggested offering firms government-backed credit loans.

'Unanimously agreed'

Delegates at the event said they unanimously wanted the government to make credit available so they could retain staff during low production periods.

Jaguar Land Rover announced a reduced working week in August and is one of several large car manufacturers, along with Honda UK and BMW, to take an extended production break over Christmas, which is having an impact on component suppliers' order books.

The delegates also unanimously agreed that assistance for the likes of Jaguar Land Rover should include a caveat that committed car producers to support their supply chains and help them to retain as much business in the UK as possible.

Their call came the same day car parts supplier, Sonas Automotive, announced it had gone into administration.

The company which employs about 200 people and has plants in Tyseley in Birmingham, and Wantage in Oxfordshire, said it was hit by the collapse of Wagon Automotive's UK arm.

Order freeze

A spokesman for Accelerate, a business support agency which helped organise the conference, said many other firms in the West Midlands region were facing the same problem.

He said: "Major orders were basically put on hold overnight and this has resulted in falling revenues, with firms reporting losses in sales since October of between 10 and 50%.

"Naturally, this has resulted in immediate cash flow problems and undelivered stock, leaving many companies faced with the prospect of making workforce cuts, in order to survive until production restarts in February and March."

Component makers and car manufacturers met the Business Secretary Lord Mandelson last month to discuss fears over the future of the automotive industry in the region.

Earlier in parliament MPs discussed a proposal from the Society of Motor Manufacturers and Traders for the government to provide guaranteed credit loans.

'Integral part'

Accelerate said it estimated up to 90,000 jobs across the region could be affected by the automotive industry crisis and seven of the biggest UK car component suppliers are based in the West Midlands region.

Last month Jaguar Land Rover announced 850 job losses at its plants in Castle Bromwich, near Birmingham, and Solihull, and research and development centres in Whitley, Coventry, and Gaydon in Warwickshire.

Aston Martin also announced that 600 jobs would go at its plant in Gaydon.

Component suppliers, such as Barton Cold Form in Droitwich, in Worcestershire, said a reduction in orders was having a crippling effect on their business.

Richard Crooks, of Business Link in the West Midlands said: "The automotive sector is an integral part of our regional economy and we need to ensure that the skills we have built up over many years are not lost for the future."

Representatives from about 70 car component firms attended the meeting

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