F&I Management & Training

Efforts to break a logjam in plans to help finance car sales were being made yesterday (Tuesday, February 17). Business Minister Lord Davies met Bank of England Governor Mervyn King to try to persuade him to give carmakers access to the Bank's £50 billion special liquidity scheme. The Government wants to use the scheme to help the finance arms of car companies to increase the attraction of financial packages to stimulate sales, but Mr King has been reluctant to open the doors to them. Suggestions for a compromise mechanism, involving the nomination of a bank to handle the flow of money, have been under discussion over the past week. Carmakers have been stepping up pressure on the Government to give the go-ahead for the scheme, and the axing of 850 agency workers at the Mini plant in Oxford on Monday (February 16) is being used to reinforce the plea for help. Meanwhile, Business Secretary Lord Mandelson is involved in European Union negotiations over providing incentives for car owners to scrap old cars in return for buying more economical models. Following the loss of jobs at Mini, Derek Simpson, joint leader of trade union Unite, said: "There is a huge onus on the Government to take drastic action to support the motor industry and to encourage people to buy cars. The banks will also have to start making credit available again or this is going to lead to disaster."

DATED: 19.02.09

FEED: AW