British government to give Nissan L50 million

Tony Blair will meet Nissan’s president yesterday as the government prepares an aid package worth at least L50m in an effort to save hundreds of jobs at the Japanese company’s car manufacturing plant in Sunderland.

The Prime Minister and Stephen Byers, trade and industry secretary, are to hold talks with Carlos Ghosn in Downing Street. The agenda is likely to include a support package for Nissan’s next-generation Micra small car, and problems caused by the strength of the pound against the euro.

In an interview with the Financial Times last month, Mr Ghosn said the strong pound was forcing the company to consider shifting the L150m investment to the euro-zone. The plant employs 5,000 people and supports thousands more in supplier companies. Unions believe up to 4,000 jobs could be at risk overall.

If Sunderland loses the Micra project, the likeliest locations are Nissan’s Barcelona plant or factories operated by Renault, the French carmaker that owns 36.8 percent of the group. Downing Street declined to discuss the agenda, saying only that “this will be a listening meeting where Mr Blair will listen to their concerns”.

Aid is likely to be provided mainly in the form of regional selective assistance, which must be approved by the European Commission – not a foregone conclusion, as the government found when it offered L152m to Rover’s Longbridge plant before BMW sold it.

Meanwhile, the future of planned investment in Peugeot’s Ryton operation in Coventry is under threat following a walkout on Sunday by more than 900 employees in protest over new working hours.

The stoppage was the second to hit Ryton’s assembly and components plants since union members last Wednesday rejected, by a narrow majority, an improved pay and shifts offer from management.

The walkouts took place ahead of the operation’s planned three-week summer shutdown which began today and a round of talks between the management and union officials aimed at reaching a compromise. Reuters