Car Companies Request Cheap Loan Deals from Alistair Darling
The car makers in Britain are going to make an appeal for direct government financial assistance during the week, requesting cheap loans in order to fund their arms of finance, as well as aid the restructuring of manufacturing operations.
This proposal, which is to be made to Chancellor Alistair Darling, is a departure signal for the car industry in Britain, which has only ever called for help in stimulating demand until now, like cutting interest rates.
The request comes while General Motors, the largest car company in America, began negotiations for a bailout this past weekend with the American government. The discussions center on a General Motors radical restructuring that will separate the company’s healthcare liabilities and crippling pension from their automotive operations, which in turn will constitute one of the biggest historical corporate rescues.
In Britain, senior sources in the industry say that car firms were eager to not be seen begging for money. They also said that they are not requesting subsidies for a sector that has dead-ended. They are requesting aid in order to support a healthy industry during an unfamiliar time of turbulence.
The sale of vehicles has sharply dropped during the last 2 months, with the market down 23% during October in the United Kingdom. The bosses of car companies, who are working through the Society of Motor Manufactures and Traders, their trade body, have decided to approach the government after their counterparts have made similar moves in America, Germany, and France.
Also, Brussels is working on an assistance package of £34 billion, which the European Investment Bank will administer.
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