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Cash crisis for UK car industry

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There seems no chance of a bail-out any time soon for Britain's crisis-stricken carmakers, although the Government is reportedly looking at ways to help the industry.

What appears certain is that it will not get any of the Bank of England's £200 billion liquidity fund earmarked for the banks, despite urgent calls for action.

Unions and the industry trade body have warned that companies may run out of cash within weeks unless they get help, threatening the jobs of half their 850,000 workers.

The trade union Unite reportedly believes the industry needs £13 billion to see it through the recession, while Vauxhall has said it is asking staff to take sabbaticals on 30% pay as it seeks to avoid redundancies.

The Government was thought to be working on a package over the weekend that does not involve direct funding. But a Treasury source reportedly told the Mail on Sunday that no specific proposals had yet gone before Chancellor Alistair Darling.

The Government is believed to be looking at providing state-backed loans, such as bridging loans on commercial terms and wider guarantees for loans from banks.

© Press Association 2008