The £2.3bn rescue package for the UK automotive sector announced yesterday by Peter Mandelson continues to receive a mixed reception.
The government met with the car industry earlier today – and while the manufacturers said the discussions were constructive, union leaders warn that much more needs to be done to avoid massive job losses.
Tony Woodley, joint leader of Unite
Speaking after the meeting with Lord Mandelson today, Woodley said the £2.3bn scheme needed to be expanded.
"We have made it clear that yesterday's announcement was a good start but it will not in itself be quick enough to offset potentially tens of thousands of job losses. We need an immediate cash injection.
"The message is well done - but there is much more to do."
Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders
Everitt said today's meeting was serious and constructive.
"We acknowledged the positive steps set out in yesterday's statement and have agreed to work together to ensure that companies of all sizes are able to access the various government support schemes, including those announced yesterday.
"As an industry, we emphasised the lack of specific proposals to stimulate demand in the market and ease consumer credit, but have agreed to meet officials later this week to discuss technical issues holding up the ability of vehicle financing arms to get access to Bank of England funding.
"In addition, we will have further discussions on measures to stimulate consumer demand, including reviewing action and planned action in other EU member states."
Francesca Bettermann, corporate automotive lawyer at Denton Wilde Sapte
Bettermann said the package was well-intentioned, but fails to help consumers and independent dealers.
"The package is well-intentioned, recognising the importance of the car industry to the UK economy, trying to retain our skills and technology, and encourage greener vehicles. So it may help some of the manufacturers and larger suppliers to stay in gear - but seems to leave the consumer and the separately owned dealers on the hard shoulder.
"It doesn't seem to address the root problem, which is plummeting demand for new cars and over-supply. In the current climate, people are worried about job security and so are thinking twice before splashing out on a new car. Many of those that do take the plunge can't get finance. Details of any credit-assistance package are very sketchy and there is no tangible help on offer.
"What is the point of enabling manufacturers to build more cars if nobody is able to buy them? Stockpiles of new cars will put further pressure on dealer margins as they struggle to sell them, and will further decimate residual values in the second-hand market, which again is not good for dealers."
David Smith, chief executive of Jaguar Land Rover
"The government has recognised the strategic economic importance of the car industry in the UK as a major provider of high-skilled jobs and a significant contributor to our balance of trade."
Richard Lambert, CBI Director-General
"This announcement is a positive first step but it is unclear how quickly any new funding will be made available or how many hoops car-makers might need to jump through to become eligible.
"The industry relies on credit to complete customer purchases. Without access to that credit, carmakers will continue to scale back production and cut jobs."
Friends of the Earth's transport campaigner Tony Bosworth
"We welcome the government's recognition that car manufacturers must be at the cutting edge of delivering a greener future – but ministers must do more to make the industry build smart cars that use less fuel, and provide better incentives for motorists to choose them.
"Vehicle scrappage schemes – where motorists are given grants to swap gas-guzzlers for fuel-efficient models – could be one way forward, and must be considered.
"Investing in a low-carbon future is the best way to tackle the economic and environmental challenges we face. It will cut emissions, slash fuel bills - and create thousands of new jobs and exciting new business opportunities too."
