Mandelson seeks talks after Vauxhall sale u-turn

Author: By Alan Jones, Press Association

The GM board decided after a six-hour meeting in the United States not to go
ahead with plans to sell its Opel and Vauxhall brands to Canadian car parts
firm Magna – a deal which had threatened thousands of jobs across Europe.

President and chief executive Fritz Henderson said the decision to keep
Vauxhall followed a more benign business environment in Europe and GM’s
improved financial health.

The decision will impact on 5,500 workers employed by Vauxhall in the UK,
mainly at Ellesmere Port and Luton.

Workers arriving at the plants this morning expressed “cautious optimism” that
the U-turn would be better for the long-term security of their jobs.

Business Secretary Lord Mandelson said: “I am keen for very early discussions
with GM over their plans for the business and how they will affect British
plants and workers.

“I have always said that if the right long-term sustainable solution is
identified, then the Government would be willing to support this.”

Tony Woodley, joint leader of the Unite union, and a former Vauxhall worker
himself, said the move was a “fantastic decision”, adding: “There’s no logic
in breaking up the company. I believe it is the right decision in spite of a
good deal that we’d struck with Magna.

“It is the best decision for Britain and our plants. I am absolutely delighted
that General Motors have finally done the right thing for them and for us.”

John Featherstone, Unite’s convenor at Ellesmere Port, told the Press
Association he believed there would still be some restructuring in the UK,
but unions were generally happy to be dealing with GM.

“Detail is in short supply and we don’t know what the immediate effect will
be, but I am pleased we will be dealing with GM because we know them and we
understand their culture – and they know us.

“I hope Lord Mandelson will now demand that GM gives us guarantees about
future production.”

Around 2,200 workers are employed at Ellesmere Port, producing the Astra on
two shifts, but Mr Featherstone said he hoped the plant could step up to
three shifts.

Guarantees about the future of the van plant at Luton will also be sought.

Unions struck a deal weeks ago with Magna which would have led to hundreds of
voluntary redundancies.

Despite announcing the sale to Magna, the deal was never signed although it
was due to be finalised in the coming days.

Analysts predicted today that two German plants could now close, with the loss
of thousands of jobs, as a result of GM’s decision.

GM first said in March that it wanted to offload Opel and Vauxhall after
running up losses of £24 billion last year.

After exhaustive talks it agreed to sell to Magna in September.

Workers across Europe were concerned that Magna’s takeover would give an
unfair advantage to Opel’s vast workforce in Germany, as their government
was willing to hand Magna £4 billion worth of loans.

Mr Henderson added: “From the outset, our goal has been to secure the best
long-term solution for our customers, employees, suppliers and dealers,
which is reflected in the decision reached today.”

Retaining the brand was “the most stable and least costly approach for
securing Opel/Vauxhall’s long-term future”.

He went on: “While strained, the business environment in Europe has improved.
At the same time, GM’s overall financial health and stability have improved
significantly over the past few months, giving us confidence that the
European business can be successfully restructured.”

Restructuring costs are expected to run to around three million euros (£2.7
million) – significantly lower than the bids submitted, GM said.

The Press Association reported on September 10 that GM was set to retain
ownership of its European business.

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