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This week’s bailout – the motor industry

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Another week, another huge pile of your cash put on the line to support a failing industry – this week, £2.3 billion of taxpayer money will be used to guarantee loans to the British car industry. This raises a couple of questions:

1) Britain still has a car industry? Really?

2) Where is all this money coming from, I thought the country was broke?

For a start, it turns out that quite a few companies are still manufacturing cars and parts in the UK, such as Nissan and Honda, and some of the more well known British names like Mini, Bentley and Aston Martin are still being built here despite being owned by foriegn companies. According to the Beeb, the country’s car industry accounts for 800,000 jobs. Who knew?

As for where the money’s coming from, who knows? The coffers are already empty so we can only assume the money’s being borrowed, most likely from China – which makes sense since they probably own half of the companies that are being bailed out anyway.

As with the banking bailout, there’s no guarantees it’ll make any difference – making sure the factories are able to keep churning out new motors for another year won’t make a blind bit of difference if nobody can actually afford to buy the things. It’s just as likely that the massive international corporations who own our carmaking industries will tick the necessary boxes to get access to the funds and then syphon the money off to head office in Biejing before closing down the British factories anyway. Heres a better idea: how about the government gives me a bailout so I can afford an Aston Marton to keep the economy ticking over?

Interesting side note here, the government says the bailout will encourage the development of more environmentaly friendly vehicles, which sounds like a crock to us – if this money is needed to keep struggling companies afloat, how likely is it that they’ll be throwing it at R&D projects instead of simply trying to keep the factory lights on until the recession blows over?

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