Mandelson pledges cash to help Vauxhall survive

Jul 4 2009 by Iain Laing, The Journal

BUSINESS Secretary Lord Mandelson has pledged Government support in underwriting a deal to buy struggling car company Vauxhall.

He toured the Luton plant, which has 1,500 workers and supports another 4,000 jobs, where he met managers and union officials as talks continued with potential buyers of its parent company.

He said the Government would underwrite a deal for the sale of GM Europe, but refused to be drawn on the sums involved.

“I have seen the performance record, I have seen the productivity, I have seen the safety and the lack of absenteeism. Unlike in the past when we saw Britain’s carmakers and their unions frankly being part of the problem, it’s very different now. Definitely here in Vauxhall they are part of the solution.”

Canadian car parts maker Magna, backed by Russia’s State-owned Sberbank, was selected last month as preferred bidder for GM Europe, but other groups are interested, Lord Mandelson confirmed.

“I believe that Luton should be and will be part of Magna’s long-term plans, but it’s not a done deal,” he said. “We have to make sure that what we are investing in is not just commercially viable, but is long term.”

He said the Government was doing everything possible to save car making, especially in Luton and Ellesmere Port. “There’s a lot of people’s jobs and businesses counting on continued production. I am talking to all the right people and I’m going to all the right meetings, but what we have to do as a Government, because we are looking after taxpayers’ money, is to ensure any solution is commercially viable and long term.” He said aid could be loans or loan guarantees. Unite assistant general secretary Len McCluskey welcomed the support.

He said: “These workers have done everything that has been asked of them and much, much more, to turn these plants into the best in Europe.”