Despite the fact that General Motors sold more cars in the UK than anywhere else in Europe, Vauxhall workers remain fearful for their jobs as the US manufacturer closes in on the sale of its European business.
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Some 350,000 Vauxhalls were sold in Britain in 2008 making it the number two brand behind Ford and giving it 14% market share. In Germany, Opel captured just 8% of its home market.
But Bloomberg News notes that it has been the German government that has stepped in with bridging loans to keep Opel’s operations afloat and pave the way for its sale to the consortium led by Magna International.
Magna says it will need to lose up to 11,000 workers but has pledged to retain all four production sites in Germany after the government provide EUR1.5 bn ($2.1 billion) in loans.
This has raised concerns that if cuts have to be made, they will come in the UK rather than in Germany.
Particularly exposed is commercial vehicle van plant in Luton which makes vans for Vauxhall, Nissan and Renault. It is understood there is a clause in the contract which would allow Nissan and Renault to pull out of the assembly deal in the case of a change of ownership.
Van production in the UK is already plummeting. LDV this week reapplied to go into administration after potential investor Weststar of Malaysia was unable to raise the finance to acquire it while Ford has been paring back Transit production at Southampton.
Vauxhall’s Ellesmere Port plant looks less at risk given that it has received significant investment to tool-up for the new generation Astra.
When asked about the future of Luton, which employs 3,000 people, Magna Co-Chief Executive Officer Siegfried Wolf said earlier this week: “At end of the day, companies have to be profitable. Companies that are not profitable are not good for society.”
Also this week, Klaus Franz, head of the GM Europe works council, said that Luton is threatened, together with Bochum in Germany, and Antwerp, Belgium. Luton workers accuse the UK government for not showing any commitment to manufacturing
Analyst Peter Schmidt of Automotive Industry Data told Bloomberg that he would be “seriously concerned” if he worked at Vauxhall while the Department for Business, Enterprise & Regulatory Reform (BERR) said in an e-mail to the news service that securing Vauxhall’s future is a prime concern for the government.
