The U.K. government announced that it will provide £360 million ($550 million) in loan guarantees from its Automotive Assistance Program to Ford Motor Co. (F) to support its research and development for commercial vehicles and low carbon emission diesel and petrol engines. The grant will also back Ford’s investment in new production facilities for low-carbon engines across the U.K.
The grant will be provided in response to the company’s bid for a £450 million ($687 million) loan from the European Investment Bank. Ford plans to invest £1.5 billion ($2.3 billion) over 5 years to develop low carbon emission diesel and petrol emissions cars across its UK sites. The investment will protect around 2,800 jobs in the nation.
The U.K. government has also provided a grant of £20.7 million ($31.6 million) to Japan’s Nissan Motors to help build the Leaf electric compact car and its batteries at its Sunderland plant in northeast England. The Leaf is due to go on sale in Japan, the U.S. and some European markets at the end of this year, ahead of a full-scale global rollout in 2012.
The production of the Leaf and its batteries would entail an investment of more than £420 million ($642 million). The automaker has proposed a finance package of up to €220 million ($302 million) from the European Investment Bank.
Both of these announcements succeeded the U.K. government’s announcement of a €300 million ($412 million) loan guarantee to General Motors’ European arm – Opel/Vauxhall – as a part of the relief package for the U.S. manufacturers of Great Britain and other European governments. The aid was provided to secure GM’s operations in Britain and the rest of Europe.
GM would require €3.3 billion ($4.5 billion) to restructure its European operations, a part of which will be sourced from the European governments. The automaker decided to sell a 55% stake in Opel to Magna International (MGA), backed by Russia’s Sberbank last year. However, it has backed out of the deal and decided to continue running the unit on its own.
Read the full analyst report on “F”
Read the full analyst report on “MGA”
Zacks Investment Research
