How Deep is the Well of Public Money? The recession’s devastating impact on manufacturing and automotive jobs, has urged the Government to step in. Through initiatives such as the Scrappage Scheme, the Automotive Assistance Programme (AAP) and the Automotive Council, the Government is trying to safeguard uncertain jobs. But they can’t continue to bail out the automotive industry with public money for ever. Sooner or later the well must run dry and who will suffer most then? Government initiatives In an attempt to increase manufacturing, the Government brought in and extended the Scrappage Scheme. In coalition with car dealerships, the scheme provided 300,000 UK citizens with a 2,000 grant to trade a vehicle older than 10 years in, for a newer model. Although the scheme increased sales and manufacturing, the funding ran out quickly. The Government decided to extend the scheme with an additional 100m. The Government’s AAP initiative provides struggling motor companies with 2.3bn in loan guarantees. Apart from supporting recession-hit automotive companies, the AAP aims to develop green technologies, fund research in UK vehicle manufacturing and create new jobs. Tata Motors was first to benefit from the AAP with a 10m loan towards building electric cars in the UK. Business Secretary, Lord Mandelson commented to The Independent: “The Government is determined to help the car industry to exploit fully the opportunities offered by green manufacturing. Today we are backing Tata as Tata backs Britain.” Read more...