The motor industry was given a double boost today with news of huge investments by two of the UK's biggest carmakers, safeguarding thousands of jobs.
Ford and Nissan will both receive Government support towards almost £2 billion investment to develop new environmentally friendly engines and a new electric car.
Business Secretary Lord Mandelson announced that the Government had agreed to back Ford's proposed £1.5 billion investment over five years for development of a new generation of environmentally friendly engines and vehicle technologies.
The Government will provide £360 million in loan guarantees towards six projects through its Automotive Assistance Programme, backing a proposed loan of £450 million which is being considered by the European Investment Bank.
Ford's plans will safeguard around 2,800 skilled jobs in the UK at its research and development centre at Dunton in Essex as well as its manufacturing plants in Dagenham, Essex, Southampton and Bridgend in South Wales.
It was also announced that Nissan will produce its electric car, the Leaf, at its plant in Sunderland.
Lord Mandelson said the Government is to commit £20.7 million under the Grant for Business Investment scheme for both the production of the car and a new battery plant at Sunderland.
This will support total investment of more than £420 million by Nissan in its UK operations.
Nissan has plans to make up to 50,000 vehicles and 60,000 batteries a year which will help to safeguard and create over 550 skilled jobs at the Sunderland plant.
Ford currently provides 29% of the UK's automotive sector research and development.
The projects to be supported cover research and development for Ford's commercial vehicles such as the Transit and Connect vans and the development of low carbon emission diesel and petrol engines.
This includes investment in production facilities for new lower carbon engines in Bridgend which was also supported by the Welsh Assembly Government last year. Currently 25% of all Ford engines worldwide and over half of all Ford diesel engines are made in the UK
Lord Mandelson, who will visit Ford's site in Dagenham today, said: "Ford is a major investor in research and development in the UK. Its proposals represent further significant investment in the UK. The Government stands ready and willing to support these innovative research and development projects backed by a highly skilled workforce.
"As part of the automotive industry, Ford has an important role to play in the UK's aim to be one of the leading manufacturers of low carbon vehicles."
Ford chairman Joe Greenwell said: "Ford welcomes this positive support from the Government. It greatly assists in delivering Ford's commitment to invest over £1.5 billion in new, affordable, volume-produced low CO2 technologies."
The Business Secretary announced the Government investment for Nissan as one of the company's top executives demonstrated the advanced technology of the car at the Business Department's offices in London.
Lord Mandelson said: "This investment is a fantastic vote of confidence in the Sunderland plant and its excellent workforce.
"The automotive sector is of key importance to the UK. It supports R&D, technological innovation, skills and a supply chain that's a mainstay of the wider manufacturing sector.
"Today's news from Nissan, with support from Government, shows that by working together we can achieve our aim of making the UK a world-leader in ultra-low carbon vehicles."
Andy Palmer, senior vice-president responsible for Nissan's global electric vehicle strategy, said: "The world is at the dawn of a new era in automotive transport. Nissan Leaf, which will go on sale later this year, is a five-seater hatchback that offers the same space, practicality and performance of a similar car in its class - minus the tailpipe emissions.
"Thanks to the UK's firm commitment to a low carbon future in terms of infrastructure, customer incentives and educational programmes, Nissan Leaf will be built at Sunderland, making the UK the third country in the world to produce this revolutionary car."
Nissan has already announced production of the all-electric Leaf hatchback in Japan and the United States, with the car due to go on sale at the end of this year.
The company has not specified how much the car will cost, saying only that it will be competitive with similar-sized cars with conventional engines.
Founded in 1984, Nissan's Sunderland factory employs around 4,000 people and built its five millionth vehicle in June 2008.
Government support for Nissan and Ford follows last week's announcement of a 300 million euro loan guarantee to General Motors Europe, helping to secure the company's operations in the UK at Ellesmere Port and Luton.
Professor Stephen Glaister, director of the RAC Foundation, said: "The aim is to have 1.7 million electric cars on the road by 2020 to help meet climate change obligations.
"This is a big challenge, but today's news shows that the major manufacturers are serious about making green vehicles available to the mass market. What's even better is that a lot of the skills necessary to do this will be here in the UK."
Professor Edmund King, AA president, said: "The AA welcomes the Government's decision to safeguard motor manufacturing jobs and to help boost low carbon motor manufacturing in the UK.
"In the future we will have a mix of lower carbon vehicles from more fuel efficient combustion engines, through to electric cars, plug-in hybrids and hydrogen fuel cell vehicles.
"I am working with Newcastle University and One North East to help promote the NE as one of the 'plugged-in places' for electric vehicles so the Nissan decision to build the electric car, the Leaf, in Sunderland is a major boost for the region."Reuse content