Jobs query over Vauxhall deal
May 30 2009 by Iain Laing, The Journal
BUSINESS Secretary Lord Mandelson said last night he will be seeking swift confirmation from Magna, the likely saviour of GM Europe, that no Vauxhall jobs in the UK will be lost in a deal to keep the car company afloat.
Speaking as talks on a deal continued in Berlin, Lord Mandelson said he understood a shared ownership deal would be reached between Vauxhall owner GM and Magna, a Canadian car parts manufacturer.
The deal came closer after the other possible buyer, Fiat, dropped out of the bidding, citing “unreasonable risks” in the possible agreement on offer.
Lord Mandelson said an initial memorandum of understanding had now been signed between GM and Magna, which is part owner of Sunderland’s Magna Kansei, which has more than 300 staff.
“I will, of course, look forward to a very early meeting with Magna,” he said. “I will be seeking from them reinforcement of the commitment they gave to me last week to continued production by Vauxhall here in the UK.”
“They made clear to me that they are committed to continued production by Vauxhall in the UK. I take that at face value.”
He indicated that both British and German governments thought it would have been “better” if GM in the USA had “continued a bit of competition for ownership and kept more players in this race”, rather than deciding on Magna so quickly.
The possible breakthrough in Berlin emerged just as talks between EU industry ministers on GM’s fate were ending in Brussels. The European Commission, which called the ministers to Brussels with GM on the brink of bankruptcy, said it was vital any deal fully respected EU competition rules, and that German negotiators took account of the fate of Opel/Vauxhall jobs on the line in the rest of Europe as well as in Germany itself.
Magna also plans 2,500 job cuts among GM’s 25,000 German-based staff – far less than Fiat’s plan to cut 10,000 German GM jobs if it took over.
Lord Mandelson said it was “pretty likely” the deal would go through, making Magna International, its partner the Russian savings bank, and the General Motors parent company in America, the new “shared owners” of Vauxhall in the UK.
He said: “Unless it collapses or unless the company as a whole, General Motors, slides into administration before the finances are repaired – in which case that might bring other players into the game – I think it’s almost certain that these new owners will be agreed in due course.
“It looks as if General Motors in Europe can be saved and can be turned round, but of course it will involve change.”
