Page last updated at 20:44 GMT, Tuesday, 3 February 2009

Car makers call for immediate aid

Business leaders at the International Convention Centre meeting in Birmingham
Business leaders are expected to ask for tax incentives to increase car sales

The West Midlands car industry is expected to ask the government for more immediate funding when Lord Mandelson visits Birmingham on Thursday.

Key players agreed their demands at a business summit in the city on Tuesday.

It comes in spite of a government aid package announced last week, BBC correspondent Peter Plisner said.

He said it had transpired that it could take them months to access the 2.3bn loans on offer. Business leaders said they needed the help now to survive.

Skills drain

Jaguar Land Rover chief executive David Smith was among the union leaders and industry experts who attended the meeting at the International Convention Centre to discuss how to avoid further job losses and shut downs.

Their wish list is likely to include faster access to government loans and loan guarantees, as well as money to retain skilled workers on short-time working.

The fear is skilled staff will leave the industry because they can not survive on a reduced income.

Their final demand will probably include tax incentives to encourage people to start buying cars again, along the lines of the "scrappage schemes" used in France and Germany where customers are given discounts for trading in old cars and buying new ones instead.

Last week's aid package did not go far enough.
BBC correspondent Peter Plisner

The region's car industry has already seen hundreds of job losses and several plant closures in an attempt to cope with falling demand.

Last month, Business Secretary Lord Mandelson outlined the package which he said would help the industry weather the downturn in the global economy.

It includes a scheme to unlock 1.3bn of loans from Europe for car manufacturers and major suppliers, with an additional 1bn worth of loans guaranteed by the UK Government.

Official car sales figures published on Thursday are likely to show a 30% drop nationwide on January car sales in 2008.

The feeling at the meeting was that last week's aid package did not go far enough and at some point the government would have to provide more help, considering it has bailed out the big banks twice already.


The Midlands car industry has seen hundreds of job losses

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