Page last updated at 04:57 GMT, Saturday, 21 February 2009

Union stands by car plant warning

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

The Unite union has defended its claim that a major, unidentified UK car plant could close within days unless it gets financial help from the government.

Business Secretary Lord Mandelson warned against "feeding rumours" and said such comments could in themselves cause damage to the UK car industry.

Culture Secretary Andy Burnham said the union claims were "irresponsible".

But Unite insists more than 6,000 UK jobs are at risk and it would have been irresponsible not to have spoken up.

'Difficult time'

Unite joint leader, Tony Woodley, warned on Friday that the unnamed plant, which he said employed more than 6,000 people directly or indirectly, needed urgent state aid to stay open.

He said the government had to act to prevent what he described as "a catastrophe".

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

The union says it would have been irresponsible to have named the company but also irresponsible not to have mentioned its plight.

Unite sources have told the BBC they believe there is government money available for a lifeline but that ministers have not grasped the urgency of the situation.

A source close to Mr Woodley said he had not taken the step of speaking up lightly.

But the government says such comments are potentially very damaging and it is in talks with key manufacturers.

Lord Mandelson warned the union that such "rumours" could "turn into a shockwave that destabilises a company or an industry and brings about the very outcome that we are seeking to avoid".

Mr Burnham also criticised the union's comments, telling BBC Radio 4's Any Questions: "I think it's irresponsible really to put an unfounded rumour of that kind into the public domain.

"It's quite clear to anybody with eyes and ears that the car industry is facing a very difficult time."

But he added that it was "absolutely right" that ministers were being asked to do more for the car industry "given its importance to the British economy".

Last month, Lord Mandelson announced a series of government measures aiming at supporting the car industry.

These included guarantees to unlock loans of up to 1.3bn from the European Investment Bank, as well as a further 1bn in UK government loans, to fund investment in greener vehicles.

The Department of Innovation, Universities and Skills also said it was prepared to increase funding to help train carmakers' employees from 65m to 100m.

Tony Woodley calls for urgent government action

Mr Woodley's comments came as figures from the Society of Motor Manufacturers and Traders (SMMT) showed new car production in the UK fell dramatically in January compared with the previous year.

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

Car firms have been hit by falling demand amid the wider economic slowdown and the SMMT said the decline in vehicle output highlighted the need for more measures to help the industry.

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

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