US car industry receives initial loan package approval

11 December 2008 #SMMT News

The US House of Representatives has approved a $14bn (£9.4bn) loan package for the US car industry after the White House and leading Democrats reached broad agreement on a support plan.

If approved by the Senate, the legislation would provide loans to car manufacturers to keep them in business over the coming months. It would involve the appointment of a ‘car tsar’ to oversee the money who would have the power to force the automakers into bankruptcy if they did not restructure their businesses to become viable.

Commenting on the impact the US loan package may have on the UK automotive industry, SMMT chief executive Paul Everitt said: ‘The US loan package underlines the strategic importance of the automotive industry to a modern economy and the exceptional circumstances it faces. The US government has acted positively to support its national industry and while the situation in the UK is significantly different, we continue to urge the government to act now to support UK manufacturing.’

On behalf of the industry, the Society of Motor Manufacturers and Traders (SMMT) is calling for a package of measures to support the UK automotive sector from dealers to vehicle manufacturers, through to the supply chain. The package includes allowing manufacturers’ finance companies access to the Bank of England’s special liquidity arrangements, loan facilities, a review of motoring taxation and support for training, research and development. The package was presented to the secretary of state for business, enterprise and regulatory reform, Lord Mandelson at a meeting on 27 November following which, government and industry agreed to collaboratively explore a range of solutions in a timescale that matches the urgency of the situation.


Filter News

Update Newsletter