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UK jobs hope as GM deal agreed Union voices GM deal job concerns
(about 4 hours later)
Business Secretary Lord Mandelson has said he is optimistic that Vauxhall can be saved, as a deal to rescue GM's European businesses has been reached. Union leaders say they fear for UK jobs after a deal was announced to save the European arm of General Motors.
Germany has agreed a deal with Canadian car parts maker Magna International to take over most of GM Europe, which owns Vauxhall and Germany-based Opel.Germany has agreed a deal with Canadian car parts maker Magna International to take over most of GM Europe, which owns Vauxhall and Germany-based Opel.
Vauxhall employs 5,500 people in the UK at plants in Ellesmere Port and Luton. The UK government says it is optimistic Vauxhall, which employs 5,500 people in Luton and Ellesmere Port, can be saved.
Lord Mandelson said that Magna had made it clear that they were committed to continued production in the UK. But Derek Simpson, general secretary of the Unite union, fears German plants will be saved rather than UK factories.
Under the deal struck late on Friday night, the German government will provide an emergency loan of £1.3bn while the European arm of GM is sold to Magna, with investment backing from Russia.
Bankruptcy expected
GM in the US is expected to declare Chapter 11 bankruptcy on Monday.
Speaking after the deal was announced, UK Business Secretary Lord Mandelson said Magna had made it clear it was committed to continued production in the UK.
He added that he would be seeking a meeting to "reinforce that commitment".He added that he would be seeking a meeting to "reinforce that commitment".
Lord Mandelson was speaking after reports that Magna had reached an agreement in principle to rescue GM Europe.
"It looks as if GM in Europe can be saved, it can be turned around," he told the BBC.
But he added: "Of course it will involve change, there is excess capacity."But he added: "Of course it will involve change, there is excess capacity."
GM in the US is expected to declare Chapter 11 bankruptcy on Monday. I want to know, clearly quite frankly what the UK government's doing to try and ensure that the Vauxhall plants here are indeed as safe Derek Simpson
Late-night talks Mr Simpson told BBC News: "I'm not entirely certain where it leaves Vauxhall. If there is overcapacity in Europe and Magna and the people associated appear to be making very strong commitments not just to Opel but particularly to the German plants, doubtlessly based on the support of the German government, it makes you wonder where the cut in capacity will come.
"That's the great worry - that the German plants will be saved and that just puts more pressure on everywhere else, obviously including the UK."
While there was no reason why Vauxhall could not be saved, he said it was "easier, cheaper and quicker to dismiss UK workers than elsewhere in Western developed Europe".
Mr Simpson said the British government could have been more involved in the negotiations, which took place in Berlin and were attended by German chancellor Angela Merkel and other ministers as well as car firm representatives but not Lord Mandelson.
He added: "I want to know, clearly quite frankly what the UK government's doing to try and ensure that the Vauxhall plants here are indeed as safe."
See GM production centres in EuropeEnlarge MapSee GM production centres in EuropeEnlarge Map
Talks in Berlin - attended by Chancellor Angela Merkel, other German ministers and officials from the German states that contain GM plants - discussed the offer from Magna. However he said it was "understandable" the German government had been at the forefront of negotiations, with about half of GM Europe's 50,000 workers employed in Germany.
Speaking before the deal was struck on Friday, Tony Woodley, joint Unite general secretary with Mr Simpson, said any deal would be better than the company going into administration.
He said he hoped the UK government would "get really into negotiations and try to make sure that both of our plants have a long-term future in this really important manufacturing industry".
He added: "If the negotiations that finally settle down see any of our two car plants close then quite frankly questions will have to be asked as to how competent and how capable and how energetic we have been in securing jobs for our country."
Immediate loan
Magna, backed by a Russian bank and Russian truckmaker GAZ, says it will invest more than 500m euros into Opel.Magna, backed by a Russian bank and Russian truckmaker GAZ, says it will invest more than 500m euros into Opel.
The ultimate decision on who can buy Opel and Vauxhall has rested with GM but the German government's preference has been key because Berlin pledged the most financial support for the eventual buyer. About half of GM Europe's 50,000 workers are employed in Germany.
The German government is expected to provide an immediate loan facility of 1.5bn euros ($2.1bn).The German government is expected to provide an immediate loan facility of 1.5bn euros ($2.1bn).
The other potential bidder had been Fiat, which did not attend Friday's talks with the German government, saying Berlin's request for additional funds was "unreasonable".The other potential bidder had been Fiat, which did not attend Friday's talks with the German government, saying Berlin's request for additional funds was "unreasonable".
Magna's willingness to put forward bridging finance had put them in a better position than Fiat, Lord Mandelson said.
Do you work at any of GM's plants in Europe? What are your hopes for the future of the company. Send us your comments using the form below.Do you work at any of GM's plants in Europe? What are your hopes for the future of the company. Send us your comments using the form below.
The BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide. Terms & ConditionsThe BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide. Terms & Conditions