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Wolfrace
20090527 Wednesday May 27, 2009

Will Vauxhall pay for GM Europe's security?

With the ongoing talks concerning the emergency sale of GM Europe, union leaders here have expressed fear that 5000 Vauxhall workers might lose out to Opel in Germany when a deal is reached. There are three companies bidding for ownership of GM Europe - Fiat, a Canadian parts maker called Magna and private equity firm Ripplewood Holdings. Depending on who is successful, UK plants at Ellesmere Port and Luton may be saved or potentially closed.
    The British government are currently reluctant to involve themselves in talks to secure the future of Vauxhall. In Germany the government has pledged
billions of Euros to support buy-out bids that would secure Opel's future.
If Fiat succeed in their bid they'll have the backing of the German government, which means that Opel will be secure in Germany because Fiat could afford such a buyout with political backing. This affects the UK because Fiat will have their finances firmly sunk into Germany, at the potential expense of Vauxhall in the UK.
    It will still take weeks to work out how much of the organisation has to be cut back to turn GM Europe into a working business again. It will take a similar amount of time before the future of Vauxhall is secured. Until then, Vauxhall's UK workforce will have an uncertain future at the expense of German workers moving towards securing their own job security and that of the GM business in Europe as a whole.

TV Comment:
The positive thing for Vauxhall is that Ellemere Port is one of the most efficient car plants in Europe and has already been designated to build the new Astra. The UK is also provides GM Europe with their largest market share, so the Vauxhall brand is likely to be and important part of any restructure.


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