Britain unveils $3.2B bailout plan

Kevin Sullivan - Washington Post

LONDON, January 30, 2009: The British government yesterday announced a $3.2 billion plan to make Britain's struggling automakers "greener, more innovative and more productive" as they battle through the global economic downturn.

Unlike the U.S.'s $17.4 billion bailout of General Motors and Chrysler and France's plan to funnel up to $9.6 billion into its ailing carmakers, the British plan would provide mainly loan guarantees and worker training.

"The industry is not a lame duck, and this is no bailout," Business Secretary Peter Mandelson said in Parliament. "There is no blank check on offer, no operating subsidies."

The plan would help Jaguar Land Rover, Vauxhall and other manufacturers borrow about $1.8 billion from the European Investment Bank and provide guarantees for another $1.4 billion in loans to develop green auto technologies such as cleaner engines and hybrid cars.

British auto industry officials recently reported car production in December was about half of what it had been a year earlier. Manufacturers have cut hundreds of jobs, idled plants for extended periods over the Christmas holidays and warned of deeper cuts ahead without aggressive government action.