Special Report:Global Financial Crisis
by Wang Dongying
LONDON, Feb. 23 (Chinese media) -- Car production in Britain
fell dramatically in January as shrinking demand dealt a heavy blow to
manufacturers amid the global economic crunch. The British government is now
facing calls to bail out the industry, boost output and further green
production.
FALLING
OUTPUT
In the face of the worst economic crisis in decades,
demand for made-in-Britain is at its weakest in 17 years, and a sharp decline in
output is expected over the next three months, the Confederation of British
Industry (CBI) said recently.
Only 12 percent of companies expected output to
increase over the next three months, while 56 percent said it would fall,
according to CBI's latest monthly industrial trends survey.
"The weak pound has made UK exports more competitive,
but this advantage has been outweighed by falling global demand," said John
Cridland, CBI deputy director-general.
Car production in particular has suffered a sharp
decline, plunging 58.7 percent in January to 61,404 units, with commercial
vehicle output posting a substantial fall of 59.9 percent to 8,351,according to
the latest figures released by the Society of Motor Manufacturers and Traders
Limited (SMMT).
CALLS FOR GOVERNMENT
RESCUE
The British motor industry employs more than 850,000
people and produces about 1.75 million vehicles per year. To keep its wheels
turning, the government is facing calls to pour cash into the sector, but the
move seems to be losing favor among the public.
"The extent of the decline highlights the critical
need for further government action to deliver the measures already announced and
ease access to finance and credit," said SMMT Chief Executive Paul Everitt.
Unite, Britain's largest labor union, also warned
that a declining output underlines the fact that the country's car industry is
in crisis, joining in calls for a government bailout.
The British government unveiled a rescue package at
the end of January, which called for "both an economic objective and
environmental imperative," including loans of up to 1.3 billion pounds (1.88
billion U.S. dollars) from the European Investment Bank, as well as a further 1
billion pounds (about 1.45 dollars) in British government loans for eco-friendly
vehicles.
"The government needs to act fast to inject cash into
the car economy because the banks are failing to do so," said Tony Woodley,
joint general secretary of Unite.
To highlight the worsening situation, Woodley warned
last Friday that at least one British car producer, which employs more than
6,000 people, faces risk of closure. He declined to identify the plant but said
urgent state aid is needed to rescue the declining industry.
The government has described the statement as
scare-mongering, which could destabilize a company or even an industry. However,
the government's response failed to ease public concern that the British car
industry might be on the brink of collapse.
IS A BAILOUT
JUSTIFIED?
Production for overseas markets, particularly Europe,
has dealt with the downturn better than production for the domestic market, with
a record 83.5 percent of car output allocated for export in January.
According to Everitt, "European markets have been
lifted by scrap page incentive schemes."
It was reported that the SMMT has proposed Britain
follow France and Germany in adopting the so-called "scrap page scheme," which
says owners of old cars and vans who scrap and replace them with new ones will
receive a bonus for the changeover.
The incentive is expected to boost car sales as well
as reduce emissions since older and more polluting vehicles will be removed from
the roads.
However, critics of the government's bailout plan say
the auto industry should adjust to the changing situation by lowering car prices
to clear stocks.
Falling car sales and mounting stocks are believed to
be justification for a government rescue plan, but it will pile more pressure on
the country's taxpayers since the government has already spent billions on
bailing out many high street banks.
Some people suggest the government invest more in
small and medium-sized businesses, instead of only concentrating on big
companies.
MORE EFFORTS NEEDED FOR
GREENER CAR INDUSTRY
On the environmental front, the ailing auto sector
across the world has been strongly urged to step up efforts to turn out greener
cars with higher efficiency and less pollution.
In response, the British government decided to
increase funding to direct carmakers toward producing greener cars.
Over a period of 10 years, the average CO2 emissions
of new British cars only lost 24 grams per kilometer (g/km), or 13 percent, to
touch 165g/km in 2007. This means carmakers have to intensify efforts to improve
green production, so that they can attain the EU limit for new car emission, set
at 130 g/km for the year 2012.
Climbing the green ladder is an important goal, but
returning the industry's production to normal has become more urgent, as the
plunging output has led to significant job losses, shorter working hours and
factory closures since the economic downturn started to bite in October.
Job cuts and reduced production have hit all car
manufacturers across Britain, including Aston Martin, which is to shed 600 jobs,
BMW, set to lay off 850 staff, and Nissan, which is making over 1,200 workers
redundant.
Britain has been warned that unemployment will reach
close to 2.9 million at the end of the year. The battered car industry may cause
more people to lose their jobs as the recession deepens.
Posts
No comments:
Post a Comment