UK: Government aid key to GM European restructuring

By just-auto.com editorial team | 18 November 2009

GM's acting head of European operations Nick Reilly has stressed the importance of aid commitments from European governments as GM assesses the restructuring of its European manufacturing footprint.

Reilly was speaking in London last night following talks with the UK government's business minister Lord Mandelson.

GM is aiming to produce a new turnaround plan for Europe over the next few weeks and and wants aid to supplement further investment of its own.

Reilly said there was no 'bidding war' between European countries looking to preserve local auto jobs with financial support. However, he also made it clear that funding assistance could influence GM's plan.

Reilly also confirmed that GM plans to cut European capacity by around 20%, with the loss of as many as 10,000 jobs.

Plant closures remains an area of considerable uncertainty, although Reilly said that GM is looking to shed volume equivalent to the output of three plants.

He said he hopes that all European countries with Opel/Vauxhall operations would contribute to the financing package.

Lord Mandelson said in a statement after the meeting with Reilly that GM's restructuring plan represented a solid commitment to the Vauxhall plants.

"GM will be looking for financial support and the UK is prepared to underwrite it," Mandelson said.

Reilly also met union leaders in the UK and said the two British Vauxhall plants had a future.

"At this point, we think there is a good future for those operations," he said. However, the Luton van making plant is also dependent on JV partner Renault's long-term plans.

He also said there may be a chance to "quite significantly" reduce the 800 job cuts for Vauxhall previously expected.

Mr Reilly also expects Opel to return to profitability by 2011. 

See also: EU to host Opel/Vauxhall meeting