BBC News Online: Business

Grant boost for UK Nissan workers

The money boosts the chances of the Nissan plant at Sunderland to secure a £203m contract to build the new Nissan Micra.

A decision on whether to build the model at Nissan's Tyne and Wear plant or at a factory run by its parent company Renault in Flins, north west of Paris, is expected to be made by the end of the month.

Nissan has said the aid would not be the deciding factor - but union officials believe Sunderland will have a better chance of winning the contract once the aid is approved.

"The £40m will not guarantee that the new Micra will go to Sunderland, but it is an important part of the jigsaw," said Sir Ken Jackson, general secretary of the Amalgamated Engineering and Electrical Union.

"The government has offered funds and political support, now it is up to Nissan to recognise that Sunderland is the perfect place to build the Micra."

Workers at Sunderland, the most efficient car plant in Europe, have just accepted highly flexible shifts to allow production seven days a week

In France, there is a 35-hour ceiling to the working week.

Relocating work

But Nissan's concerns about Britain not being in the euro could be a more significant factor.

The company has said that, thanks largely to the strength of sterling, it might be better off relocating work to its operations inside the eurozone.

If Sunderland wins the contract, the future of the plant is guaranteed.

But if it does not, union officials think it will be the beginning of the end for its 5,000 workers.