Nissan says battery plant still on track

Dec 15 2009 By William Green, The Journal

NISSAN last night insisted a project designed to bring manufacturing jobs to the North East is on track, despite concerns over the Government’s help for the car industry.

In July this year, the Sunderland car maker unveiled plans to create hundreds of new jobs in a £200m investment to build batteries for electric cars.

The Government said at the time that it was working with the company on supporting the development by offering grants and loan guarantees, including support through its Automotive Assistance Programme (AAP).

But a report from MPs yesterday revealed that not one single loan or loan guarantee has been made under the programme.

The scheme, which involves a £2.3bn package of loan guarantees to Britain’s car makers and large suppliers, was announced in January this year.

But "little progress has been made in releasing funds through this scheme", said a report from the House of Commons Business Innovation and Skills Committee.

Peter Luff, the committee’s Tory chairman said: "When it was announced, AAP represented a genuine opportunity to help the automotive industry.

"But it is now December and not a single loan or loan guarantee has been made.

"The scheme seems to have been a wasted opportunity to support this important manufacturing sector during the recession. It is up to the Government to prove us wrong, but they must ensure that funds are released to companies very quickly.

"It is late in the day for this to happen, so the Government must act soon."

A spokesman for the Department of Business, Innovation and Skills said: "It is important to understand that the AAP is about long-term investment projects, rather than short-term rescue.

"We have to work at the pace demanded by the companies and also have to consider the best interests of the taxpayer.

"Following direct contact with over 90 companies, we are now working on detailed plans with some 10 companies as part of the AAP on projects worth around £2bn."

The spokesman added: "As always, when taxpayers’ money is at stake, we must ensure that we are offering the right support to the right companies.

"As we’ve seen with Jaguar Land Rover, some companies are able to secure funding from other sources, which is good news for the industry and taxpayer."

A Nissan spokeswoman said: "As far as we are concerned, our battery plant is still ongoing. We may or may not use money from the AAP. Discussions with the Government are ongoing."

The spokeswoman also said that there was not yet any news about the car factory at Washington in Sunderland being chosen by Nissan to build electric vehicles.

The North East facility is competing for the work against Nissan plants in France and Spain.

It is hoped it will be the centre of a Low Carbon Economic Area in the North East, specialising in the production of environmentally-friendly vehicles.