UK grants Ford $640 million loan guarantee to preserve exports1 min read . Updated: 22 Jul 2020, 11:50 AM IST
The guarantee provided by the UK will help Ford increase investment in electrification and protect jobs at its sites in Essex and Dagenham.
The UK government has granted a 500 million pound ($640 million) loan guarantee to Ford Motor Co. to support the automaker’s substantial exports of engines and transmissions from Britain.
The guarantee, which covers 80% of a 625 million-pound loan from commercial banks, will help Ford increase investment in electrification and protect jobs at its sites in Essex and Dagenham, the UK’s Department for International Trade said in a statement.
“This financing will help to maintain Ford as a key UK exporter," said Graham Hoare, chairman of Ford in Britain, which generates 2.5 billion pounds of sales overseas annually. Roughly 85% of the engines and 100% of the transmissions the company builds in the UK are shipped overseas.
Ford and its automotive peers in the UK face an uncertain future, with the prospect of tariffs on sales to the EU looming in the event of a no-deal Brexit next year. They also face extra red tape in the form of customs declarations, separate regulatory regimes and proving the origin of their goods.
The threat of border chaos with the UK’s largest export destination is another concern, given the lack of readiness among traders for new paperwork requirements and companies’ Brexit preparations being hampered by the coronavirus.
Ford announced plans last year to close its engine factory in Bridgend and is a member of Britain’s automotive trade group that last month called for the government to support the industry’s recovery from the pandemic.
Despite these challenges, UK International Trade Secretary Liz Truss said the British government is focusing on the needs of carmakers.
“A thriving automotive industry is vital to the success of the UK economy," Truss said in the statement. “We are putting its needs at the heart of our strategy to remove barriers to trade when negotiating free trade deals."
This story has been published from a wire agency feed without modifications to the text.