Coronavirus: Suppliers ‘at risk’ without loans for big firms

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Tata Steel runs the UK’s largest steelworks in Port Talbot

Some smaller Welsh businesses have warned their future depends on larger companies, such as Tata and Jaguar Land Rover, securing UK government support.

More than 90% of the work at Bartlett Engineering in Port Talbot comes from Tata, which has asked for a £500m loan from the Treasury.

The firm said it may have to close its doors if that is not forthcoming.

The UK government has been asked to comment.

Bartlett Engineering employs 43 people and has weathered the fluctuations in the troubled steel industry in recent years, making some staff redundant, then re-employing them.

Tata has seen a drop in demand for steel, not least from the car industry, where sales have plummeted and production has halted.

Desnie Hill, from Bartlett Engineering, said her company was so dependent on Tata that it would be “devastating” and would mean “probably closing the doors” if the steel giant did not get the loan.

She said she understood concerns about providing taxpayers’ money to global corporations.

However, she added: “This time round even the smaller companies have been helped.

“With them helping the bigger companies it filters down, it’s a domino effect. It eventually gets down to the people who are supplying them.”

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All production at Jaguar Land Rover’s plants was suspended in March

Jaguar Land Rover is another of the many global companies to have asked for help from UK ministers after a collapse in demand for cars.

The company, which has many suppliers across Wales, has also asked the UK government for a £1bn loan.

With about 500 workers, Gestamp in Llanelli, Carmarthenshire, is one of the biggest employers in the region.

It manufacturers components for cars, including frames and safety beams, with Jaguar Land Rover a major customer.

Bosses at the plant have been focused on a “phased return to work” with added protection measures being put in place, including personal protective equipment, social distancing and six Covid-19 safety marshals being employed to ensure rules are implemented.

“We are facing a huge level of uncertainty, as are a number of the local supply-chain businesses who rely on our business,” said plant director Byron Davies.

He said demand was slow “with only 197 cars made in the UK in April and the biggest drop in sales since 1946, just after the war”.

The company intends to introduce more people back to work as safety allows and as demand increases for their products.

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Aberavon MP Stephen Kinnock wants the UK government to raise its Coronavirus Large Business Interruption Loan Scheme threshold

The Wales Automotive Forum said the car manufacturing industry was “fundamental” to the Welsh economy and was responsible for £3bn worth of sales a year, directly supporting 12,000 jobs.

It called for UK government support to encourage people to buy new vehicles.

“The sheer numbers, when you are talking about 12,000 associates that are either touching product that goes into a vehicle or that is producing equipment that will be used to go on a product for that vehicle,” said Rob O’Neil, of the Wales Automotive Forum.

“That shows the significant relevance and obviously the incomes generated behind those households have a substantial impact on the Welsh economy.”

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