UK government wants £2.5 billion auto loans used for green projects
The UK government has promised a series of loans to automakers and suppliers in Britain that's supposed to help them navigate the tough economic conditions that the industry now finds itself in. According to Lord Mandelson, Secretary of State for Business, Enterprise and Regulatory Reform, "The actions we and the automotive industry will now be taking together will help the industry build the bridge to a greener future for the auto sector." How so? That's a good question, and one that doesn't yet seem to have a conclusive answer quite yet.
Loans could be used by automakers to add eco-friendly updates to aging plants or for research and development costs into new technologies. Suppliers could use the money to create new parts that automakers would use to increase efficiency. According to the Financial Times, though, it's not likely that any companies that are looking for a piece of the loans will have a hard time finding green programs to justify the government's investment.
[Source: Financial Times]
Reader Comments (Page 1 of 1)
why not the LS2LS7? 4:33PM (1/29/2009)
It may seem like a good idea. But at some point you have to decide if you are bailing out the companies or nationalizing them.
The UK couldn't decide last time either, they kept throwing money at Leyland (and sub-parts) and simultaneously restricting them from making moves to make their company more profitable. So of course the company kept going further down the tubes.
The US is mired in this right now too with the controversy over not opening the engine plant in Flint for the Volt. Are you going to tell these companies they can't fix their cost structures by making parts where they are more cost effective to make? If so, that's fine, but know you're also signing up to continually give bailouts to the companies (more accurately called subsidies in this case) to make up for their inability to compete under these restrictions.
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