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UK offers auto industry $3.2B boost

  • Story Highlights
  • Business minister Peter Mandelson says measures not a bail out
  • Scheme includes loan guarantees of £1.3 B the European Investment Bank
  • Leading union Unite has been calling for £13 billion of aid
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LONDON, England (CNN) -- The British government Tuesday unveiled a $3.2 billion package of loans to shore up the country's ailing auto sector.

Business minister Peter Mandelson said the measures, which fell far short of union demands, were not a bail out, the UK's Press Association reported.

The scheme includes loan guarantees of £1.3 billion ($1.8 billion) from the European Investment Bank and £1 billion from the British government.

"This industry is not a lame duck and I am not proposing a bail-out. It has been transformed over the past decade. Productivity has risen, catching up and overtaking both France and Sweden," Mandelson said.

"In Britain, we have some of the world's most productive car plants. For the future, Britain needs an economy with less financial engineering and more real engineering. The car industry can and should be a vibrant part of that future."

Leading union Unite has been calling for £13 billion of aid for the country's manufacturing sector, PA reported.

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