Ford To Invest GBP1.5B In UK Over Next 5 Years

 By Christoph Rauwald
 Of DOW JONES NEWSWIRES
 
Ford Motor Co.'s (F) European division said Thursday it plans to invest GBP1.5 billion in four U.K. facilities over the next five years as part of its effort to foster green technology after the U.S. auto maker secured a GBP360 million loan guarantee from the British government.

"Our customers will benefit from this extensive investment and so too will the 100,000 people in the U.K. whose jobs are directly or indirectly dependent on Ford," Ford of Britain Chairman Joe Greenwell said in a statement.

U.K. Secretary of State for Business Peter Mandelson announced the GBP360 million backing of Ford's GBP450 million application to the European Investment Bank at the auto maker's site in Dagenham earlier Thursday.

"The loan ... encourages the growth of high-technology, CO2-reducing research and development in the country," Greenwell said.

Ford said the U.K. government's support represents a major step in seeking loan approval from the EIB, which would allow the company to proceed with its plans in the country.

Ford applied for GBP450 million from the EIB, which offers loans for projects aimed at improving fuel efficiency and reducing harmful vehicle emissions.

"The government's support of Ford's EIB loan application demonstrates its commitment to addressing the strategic needs of the U.K. automotive industry when it comes to supporting affordable CO2-reducing technologies," Greenwell added.

Separately, Japan's Nissan Motor Co. (NSANY) said Thursday it will build its upcoming electric car Leaf at its U.K. plant in Sunderland, northeast England.

Nissan said that construction of its a lithium-ion battery plant, which was announced last year, is set to begin in April. The facility, which will be located at Sunderland, will have annual production capacity of 60,000 batteries and will start operations in 2012 for both Nissan and its French alliance partner Renault SA (RNO.FR).

Nissan plans to invest more than GBP420 million in Sunderland in a move that would safeguard about 2,250 jobs at the company and related suppliers in the U.K. The investment will be supported by a GBP20.7 million grant for business investment from the U.K. government and a proposed EIB financing of up to GBP197 million.

General Motors Co.'s U.K. Vauxhall brand last week secured EUR300 million in loan guarantees from the U.K. government to support the Detroit auto maker's restructuring plan for Germany's Adam Opel GmbH unit and its British brand.

GM is seeking about EUR1.8 billion in state aid from European governments. The U.K.'s willingness to provide funding for Vauxhall might increase the chances of the brand's Ellesmere Port plant to produce the upcoming Ampera electric vehicle. GM Europe executives in the past have indicated that Ellesmere Port was among the possible locations to build the Ampera.

-By Christoph Rauwald, Dow Jones Newswires; +49 69 29 725 512; christoph.rauwald@dowjones.comonline.wsj.com/article/BT-CO-20100318-709554.html