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Britain Throws Carmakers a Lifeline

Britain's Business Secretary, Peter Mandelson, announced in parliament on Tuesday government plans aimed at helping the country's carmakers through these tough economic times.

Fighting against a strong economic downturn, Britain's Business Secretary outlined a series measures to assist the country's ailing automobile industry.

Speaking in the House of Lords, Peter Mandelson unveiled the package that includes $1.8 billion in special funds for the industry from the European Union and $1.4 billion in loan guarantees from the British government.

Mandelson said the British automotive industry has been hit harder than any other sector in the economy during the past six months. The U.K. car industry accounts for around 10 percent of exports and employs some 850,000 people.

The business secretary stressed the package was not a bail-out, but a program designed to help the vital industry weather the current economic storm.

Mandelson said the plan also calls for the development of greener, more efficient vehicles.

"We are determined as a government to counter the credit crunch, counter the recession, create a level playing field for industry and build Britain's low carbon industrial future. We will take as a government whatever action is possible and appropriate for us to do," he said.

Mandelson said the goal is to make Britain a world leader in the development and production of low-polluting car.

"This is both an economic objective and an environmental imperative," he said. "The automotive industry knows that it must change to succeed in this new world. It has to be cleaner and greener. The government knows this is an important national objective, a key to building a competitive and balanced economy in the future."

Most of the British auto industry is foreign owned. And due to the falling demand, many plants have cut production and jobs.

Several other European countries are also looking at ways to help their ailing automotive sectors.