Page last updated at 17:19 GMT, Friday, 20 February 2009

UK car plant 'at risk of closure'

Tony Woodley calls for urgent government action

A UK car plant that directly and indirectly employs more than 6,000 people may be forced to close within days, a trade union leader has warned.

Unite joint leader Tony Woodley refused to name the facility in question, but said it needed urgent state aid to stay open.

Business secretary Lord Mandelson declined to comment, but urged people to "stop feeding the rumours".

The comments came after data showed UK car production slumped in January.

"We've got a car plant that, within just a couple of days, would have run out of cash and needs serious financial help to stop over 6,000 people losing their jobs," said Mr Woodley.

He said the government had to act to prevent "a catastrophe".

Lord Mandelson said: "Rumours can very easily turn into a shockwave that destabilises a company or an industry and brings about the very outcome that we are seeking to avoid."

He added that the government would help if it could.

Falling demand

New car production in the UK fell dramatically in January from a year earlier, according to the Society of Motor Manufacturers and Traders (SMMT).


Aston Martin: Extended Christmas shutdown and 600 redundancies. Three-day week
Bentley: Three-day week in October and longer Christmas break. Closing Crewe plant for seven weeks from March. February announced 220 job losses and 10% pay cut.
GM (Vauxhall): Extended Christmas closure and 40-day shutdown
Honda: Four-month shutdown between February and May
Jaguar Land Rover: Series of one-day shutdowns and production cuts late 2008 plus 1,000 redundancies planned
Mini: Christmas shutdown extended by 10 days. 300 agency staff let go and one week shutdown planned for February. From March, plant will run five days per week, from seven, and a further 850 jobs to go.
Nissan: Two-week shutdown late last year and 1,200 redundancies. One shift on each line stopped until April 2009.
Toyota: One of the night shifts suspended. Four non production weeks planned
Ford: 850 jobs to go by May
Source: SMMT/ BBC Archives

A total of 61,404 new cars were produced last month, 58.7% lower than January 2008, as plants closed for extended winter shutdowns.

Car firms have been hit by falling demand amid a wider economic slowdown.

The SMMT said that the decline in vehicle output highlighted the need for more measures to help the industry.

SMMT chief executive Paul Everitt said that production for overseas markets, particularly Europe, had weathered the downturn better than production for the domestic market.

"European markets have been lifted by scrappage incentive schemes," he said.

"SMMT continues its call for a UK plan to boost the new vehicle market and support employment throughout the sector," he added.

A total of 51,272 new cars were made for export in January, down 54.2% a year earlier. Domestic car production fell 72.3% to 10,132 vehicles.

Cutting workforces

Several car firms have had to cut jobs and reduce workers' hours in response to slowing demand.

Ford has said up to 850 UK workers at the firm would be offered voluntary redundancy packages.

Lord Mandelson: 'Rumours can very easily turn into a shockwave'

BMW has said it will cut its Mini workforce at Cowley, Oxford, by 850, while 1,200 jobs are going at Nissan's plant in Sunderland.

Aston Martin is axing 600 jobs at Gaydon in Warwickshire.

Jaguar Land Rover, Bentley and Toyota, which has just announced a pay freeze for staff, have all announced either job cuts or production reductions.

Workers at Vauxhall's UK plants also fear redundancies could be made following an announcement by the company's US parent General Motors that it is to axe up to 47,000 workers worldwide.

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