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Concerns grow over Vauxhall jobs Concerns grow over Vauxhall jobs
(10 minutes later)
Concerns about the future of Vauxhall's two UK plants are growing after talks broke down in Germany over which firm will buy its parent company, GM Europe.Concerns about the future of Vauxhall's two UK plants are growing after talks broke down in Germany over which firm will buy its parent company, GM Europe.
Two of the bidders have said they will cut thousands of jobs in Europe.Two of the bidders have said they will cut thousands of jobs in Europe.
With the German government a key player in negotiations, there are fears that Vauxhall jobs could be hit hardest.With the German government a key player in negotiations, there are fears that Vauxhall jobs could be hit hardest.
But UK Business Secretary Lord Mandelson said he had received "categorical assurances" about continued Vauxhall production.But UK Business Secretary Lord Mandelson said he had received "categorical assurances" about continued Vauxhall production.
Vauxhall employs 5,500 UK workers and has plants in Luton and Ellesmere Port.Vauxhall employs 5,500 UK workers and has plants in Luton and Ellesmere Port.
Job lossesJob losses
"Vauxhall's production in the UK is a main revenue and profit stream for GM. There is no question of [GM] wanting to dispense with it," Lord Mandelson said."Vauxhall's production in the UK is a main revenue and profit stream for GM. There is no question of [GM] wanting to dispense with it," Lord Mandelson said.
"We are making sure the future of Vauxhall is secured.""We are making sure the future of Vauxhall is secured."
But he did admit that the there would be "reorganisation and restructuring."But he did admit that the there would be "reorganisation and restructuring."
"There will be some job losses here, as elsewhere [in Europe]," he said."There will be some job losses here, as elsewhere [in Europe]," he said.
The UK government has been far too slow and far too reactive Professor David Bailey, Coventry University Business School Tony Woodley of Unite: "The government has got to do more"
He also reiterated the UK government's willingness to provide funding to the new management, depending on its plans for Vauxhall.He also reiterated the UK government's willingness to provide funding to the new management, depending on its plans for Vauxhall.
Lord Mandelson was responding to criticism that the UK government should be doing more to safeguard UK jobs.Lord Mandelson was responding to criticism that the UK government should be doing more to safeguard UK jobs.
Professor David Bailey, a car industry expert at Coventry University Business School, told the BBC that, taking into account suppliers as well as Vauxhall itself, the total number of UK jobs that could be affected by the takeover is between 15,000 and 20,000.Professor David Bailey, a car industry expert at Coventry University Business School, told the BBC that, taking into account suppliers as well as Vauxhall itself, the total number of UK jobs that could be affected by the takeover is between 15,000 and 20,000.
In his view, Vauxhall workers "are very exposed."
'Too slow''Too slow'
Tony Woodley, joint general secretary of the Unite union, said that the UK government needed to be "batting for Britain".Tony Woodley, joint general secretary of the Unite union, said that the UK government needed to be "batting for Britain".
GM EUROPE BIDDERS' PLANS Fiat: Italian carmaker; plans 10,000 job cuts in Europe; could close one of four Opel factories in Germany Magna: Canadian-Austrian car parts group; Plans 2,500 job cuts in Germany; pledges to inject between 500m and 700m euros into Opel; 10% of the new company would be owned by Opel employees; GM would keep a 35% stake in the company; bid in connection with Russia's state-run Sberbank and Oleg Deripaska's truck firm Gaz The UK government has been far too slow and far too reactive Professor David Bailey, Coventry University Business School
"Whoever takes over, there will be plant closures, but [the UK government] is not putting money in and is not at the negotiating table," he said."Whoever takes over, there will be plant closures, but [the UK government] is not putting money in and is not at the negotiating table," he said.
"If we are not, common sense tells you the axe will fall outside Germany, outside Spain and outside Belgium. The government has got to do more.""If we are not, common sense tells you the axe will fall outside Germany, outside Spain and outside Belgium. The government has got to do more."
Professor Bailey added to the criticism by saying that the UK government was being "extremely vague" and had been "caught on the hop".Professor Bailey added to the criticism by saying that the UK government was being "extremely vague" and had been "caught on the hop".
It had, he said, been "far too slow and far too reactive".It had, he said, been "far too slow and far too reactive".
DeadlockDeadlock
Earlier on Thursday, talks in Germany about who should buy GM's European unit - which contains Opel and Vauxhall - ended without reaching a decision.Earlier on Thursday, talks in Germany about who should buy GM's European unit - which contains Opel and Vauxhall - ended without reaching a decision.
GM EUROPE BIDDERS' PLANS Fiat: Italian carmaker; plans 10,000 job cuts in Europe; could close one of four Opel factories in Germany Magna: Canadian-Austrian car parts group; Plans 2,500 job cuts in Germany; pledges to inject between 500m and 700m euros into Opel; 10% of the new company would be owned by Opel employees; GM would keep a 35% stake in the company; bid in connection with Russia's state-run Sberbank and Oleg Deripaska's truck firm Gaz
But German ministers and Lord Mandelson said that the four potential bidders had been whittled down to two, leaving Italian carmaker Fiat and Canadian-Austrian car parts firm Magna as the two remaining suitors.But German ministers and Lord Mandelson said that the four potential bidders had been whittled down to two, leaving Italian carmaker Fiat and Canadian-Austrian car parts firm Magna as the two remaining suitors.
Fiat has said that it will cut 10,000 jobs across Europe if it is successful.Fiat has said that it will cut 10,000 jobs across Europe if it is successful.
The German government has pledged billions of euros in loan guarantees to the company that takes over GM Europe, which means it has an important say in the bidding process.The German government has pledged billions of euros in loan guarantees to the company that takes over GM Europe, which means it has an important say in the bidding process.
Opel employs 25,000 people in Germany.Opel employs 25,000 people in Germany.
All parties have been working towards a deadline of 1 June, the date by which the US government has insisted that General Motors restructure its debt or file for bankruptcy.All parties have been working towards a deadline of 1 June, the date by which the US government has insisted that General Motors restructure its debt or file for bankruptcy.
The troubled carmaker's failure to secure a deal with bondholders this week makes bankruptcy more likely.The troubled carmaker's failure to secure a deal with bondholders this week makes bankruptcy more likely.
Production linesProduction lines
The Vauxhall plant at Luton, which employs 1,400 people, produces vans and is operated as a joint venture with Renault, a competitor of Fiat, under a contract which expires in 2012.The Vauxhall plant at Luton, which employs 1,400 people, produces vans and is operated as a joint venture with Renault, a competitor of Fiat, under a contract which expires in 2012.
Van production has halved since the onset of the economic downturn.Van production has halved since the onset of the economic downturn.
At the Ellesmere Port plant, which employs 2,200 people, a new version of the Astra car is due to roll off the production lines this autumn, supported by a government grant of £8m for training.At the Ellesmere Port plant, which employs 2,200 people, a new version of the Astra car is due to roll off the production lines this autumn, supported by a government grant of £8m for training.