Thousands of workers across the UK faced extended festive breaks today as factories hit by the economic slowdown remained closed.
Thousands of workers across the UK faced extended festive breaks today as factories hit by the economic slowdown remained closed.
Car plants and firms supplying the motor industry were worst hit, while staff fortunate enough to be returning to work were facing warnings about fresh waves of redundancies.
In Scotland, there were warnings motor dealerships across the country would be forced to make substantial redundancies in the early part of the year, while the STUC called for Holyrood and Westminster to "act urgently".
The warnings come as Gordon Brown unveils a US-style programme of public works, such as school repairs, new rail links, hospital projects and investing in broadband upgrades, to stave off the worst excesses of recession and create 100,000 jobs. The move, which echoes Roosevelt's New Deal in the 1930s, will use public money to build a "low-carbon economy" by investing in projects such as electric cars and wind and wave power.
An estimated half a million small businesses closed for at least a fortnight over Christmas and, while most were planning to open up again today, the tide of job cuts that swept though industry in the last few months of 2008 was expected to continue.
With unemployment set to break through the politically-sensitive two million barrier in the next few weeks, a number of car firms, manufacturers, estate agents and finance companies that shut down early for Christmas have remained closed, leaving normally bustling business areas, including London, eerily quiet.
Retailers are expected to respond to a disappointing December by shedding jobs early this year. Steel giant Corus is cutting production at sites by at least 30% until March and has mothballed blast furnaces at its Scunthorpe and Port Talbot plants.
Workers at luxury car maker Bentley in Crewe started their extended Christmas break on December 11 and the factory will not return to production until January 12, while the Mini plant in Oxford will stop production for an extra three days this month due to a fall in sales. Workers at Vauxhall's car plants were also given up to one month off over Christmas because of falling sales.
Yesterday, Jackson Carlaw, Scottish Conservative West of Scotland MSP, warned that the prospects facing the motor industry during 2009 have "never been more dire".
Mr Carlaw, who spent 25 years in the industry before becoming an MSP in 2007, said: "It is now inevitable that motor dealers across Scotland will be making substantial redundancies in the New Year.
"More seriously, communities should brace themselves for local dealership closures. Dealerships are sitting with record quantities of new unsold vehicles, the monthly financing of which is proving unsustainably penal.
"In addition, used vehicle stocks have been sitting unsold for months, with dramatic stock write-downs inevitable. The combination of disastrous sales and heavy stocking costs will prove too much for certain dealers so, sadly, business failures should be anticipated in 2009."
Stephen Boyd of the STUC added: "We expect the Scottish unemployment figures to worsen considerably before the recovery begins and workers across Scotland face a particularly anxious time through the early months of 2009. The STUC largely welcomed the pre-Budget report but never believed that it constituted a panacea for the UK's economic problems.
"We would urge the UK Government to take further action in Budget 2009 to support those worse affected by the downturn.
"The Scottish Government must also act urgently to ensure that its new economic development infrastructure is fit for purpose in dealing with rising unemployment."
Richard Lambert, director general of the CBI, said: "The UK Government is going to have to do more to restore credit flows across the economy. Nowhere is this more urgent than in the UK's highly-efficient automotive industry, which is now suffering serious collateral damage from the banking crisis.
"This is not a call for a blanket bailout for the industry, but without access to credit or loan guarantees on commercial terms, this vital part of the economy will incur lasting damage."
A spokesman for the Engineering Employers Federation said: "A lot of companies have had an extended shutdown, especially motor manufacturers, which has had a knock-on effect throughout the rest of manufacturing."
