Taxpayers underwrite £500m of loans to car giant Ford
TAXPAYERS will underwrite £500m of loans to Ford as ministers fight to boost exports by the automotive titan’s British business.
The cash is being provided as part of a £625m package handed out by a syndicate of banks, with state-owned UK Export Finance offering a backstop if a chunk of the loans turn bad.
Liz Truss, the Trade Secretary, announced the deal on a visit to Ford’s
Dagenham plant, which builds engines that are exported to the company’s plants around the world. Ford has around 13,000 staff in Britain.
Last year Jaguar Land Rover agreed a package of the same size under similar conditions. The cash is intended to help Britain’s automotive industry thrive after Brexit – and will be particularly welcome following a near-total collapse in car sales during lockdown.
Ford said the money will be used to fund development of electric vehicles and advanced manufacturing, along with supporting the work on next-generation vans at the company’s design centre in Dunton, Essex.
The carmaker insisted the funding is not an emergency bailout, saying it applied for support pre-pandemic. However, it highlights the UK’s lack of support for its automotive sector when compared to peer European states.
France, Germany, Italy and Spain are pumping billions of euros into their car sectors. Aid includes direct loans, along with scrappage schemes offering up to €6,000 (£5,420) to encourage motorists to buy new vehicles.
By contrast, ministers have all but ruled out a Covid package for car firms on this side of the Channel.
Barclays, Citibank, NatWest, Lloyds and Sumitomo Mitsui are providing the loans to Ford.
However, the support may not be enough to lift Ford’s exports from the UK unless the Government secures trade deals quickly as Brexit looms.
Liz Truss, the Trade Secretary, visited Ford’s Dagenham plant and said that the car giant will receive a £625m package from banks with taxpayers underwriting £500m of the funds