UK car town in a jam?

Local businesses have been hit hard by both the recession and a new shopping mall [Nadim Baba]

Al Jazeera is following the effects of the global recession on five towns across the globe. Nadim Baba reports from Luton in England.

Mention Luton to people in Britain, and it is likely they will think of the Vauxhall car plant.

To people abroad, Luton, or specifically London Luton Airport, may be better known as one of the gateways to the capital which lies just 50 km to the south.

Now, as the future of both those industries is called into question, Luton is having to think long and hard about which direction it goes in.

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Luton is a very multi-ethnic town. The population is, according to local authorities, just over 203,000. Official estimates of Luton’s ethnic make-up list 68 per cent as White, 20 per cent as Asian or Asian British and eight per cent as black or black British.

You definitely get a sense of this diversity walking around the town centre.

Luton’s main shopping area takes in the Mall Arndale, which was Europe’s largest covered mall when it opened in the 1970s. A major redevelopment to the centre is planned, bringing new retails stores, cafes and restaurants.

Businesses folding

The development is already 70 per cent rented out, but shops and businesses in the surrounding streets were hit by the mall’s arrival and now they are being hit by the credit crunch.

Another popular shopping area is Bury Park, where many shops are run by people of Pakistani, Bangladeshi or Indian origin.

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A recently-opened shopping “plaza” dominates the main street, but some businesses that  opened up inside have reportedly moved on already.

The picture one gets is mixed: while some new businesses have arrived in recent months, including a car hire firm and a sandwich shop, others have boarded up their windows.

One taxi driver there told me that in the last eight months he had seen a 60 per cent drop in trade.

Luton’s largest single employer is the airport, which is a major hub for several low-cost carriers serving mainly European destinations.

Fastest-growing airport

British television viewers got a glimpse behind the scenes with Luton Airport, a so-called reality TV series following some of the 8,000 people who work there.

Last year, the number of passengers using London Luton grew by over six per cent to almost 10 million – making it Britain’s fastest-growing airport.

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The place that has traditionally been a large source of jobs in Luton – the Vauxhall car plant – is faring less well.

Cars were first manufactured on the site back in 1905. In the 1920s, Vauxhall was bought by American company General Motors. At its peak, the plant employed more than 30,000 people.

However, despite several successes, the last car to be made at the site rolled off the production line in 2002.

Vauxhall still has a van and commercial vehicle factory there but General Motors, which is struggling to stay afloat, is warning that thousands of jobs at its European subsidiaries are at risk if governments do not step in to help.