The government has announced it will provide a £500m loan guarantee to automotive giant Ford to boost its export activities from the UK, securing thousands of British jobs.
The funding will be provided by the government’s export credit agency UK Export Finance (UKEF) through its new ‘Export Development Guarantee’ (EDG), which is designed to boost high-value exports.
The new funding programme was launched today (22 July) by international trade secretary Liz Truss at Ford’s engine production centre in Dagenham.
The EDG allows UKEF to support a company’s general export activities rather tying loans to an individual export contract.
It enables companies funded by UKEF to secure working capital for multiple export contracts, allowing them to scale up their existing export activities and invest in new premises and technologies.
Boost for Ford
The £500m guarantee will support a £625m loan facility provided by commercial banks.
The loans will enable Ford Britain to boost its capacity to export from the UK, support investment in electrification, and to upskill and protect jobs.
Though American-owned, the firm is one of the UK’s largest exporters, selling to more than 15 countries in six continents, generating £2.5bn annually in overseas sales.
Ford manufactures engines for export in a production centre in Dagenham and designs new commercial vehicles at its Dunton Campus in Essex – including the best-selling Ford Transit cargo van.
Liz Truss said the deal “firmly puts the UK at the heart of Ford’s plans to grow its export business, reduce emissions and support skilled manufacturing jobs”.
Good news for UK automotive
The announcement comes following a disastrous pandemic for the UK’s automotive industry.
Figures from the Society of Motor Manufacturers and Traders (SMMT) at the end of May showed that production plummeted by 99.7% in the month of April, with only 197 cars rolling off the production line.
There have also been fears that the failure to secure a deal with the EU could significantly hamper the industry’s recovery from the crisis.
Truss said the sector is “vital” to the UK economy, saying, “It brings prosperity and security to manufacturers across the country.”
“That’s why we are putting its needs at the heart of our strategy to remove barriers to trade when negotiating free trade deals,” she added.