Government considers role in Vauxhall bail out
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The Government says it would consider underwriting the planned takeover of General Motors’ European operations in a bid to save jobs in the UK’s Vauxhall plants.
In a visit to Vauxhall’s Luton factory today (July 3), Business Secretary Lord Mandelson told reporters that the bail out “may involve loans or loan guarantees”.
It comes as the Government continues to face calls to ensure jobs at UK jobs are not lost once it is sold.
There are up to 5,000 workers in Vauxhall factories in Ellesmere Port, Cheshire and Luton.
Magna International, the Canadian auto parts company, is the frontrunner to take over GM Europe’s Vauxhall and Opel operations. The bid is being backed by Russia’s state-owned Sberbank.
Magna has offered €700m (£610m) for a 55% stake. However, the deal is contingent on due diligence of GM Europe.
Lord Mandelson says that a business proposal from Magna is expected to be released within the next two weeks.
US parent company General Motors for its part has filed for chapter 11 bankruptcy protection in what has become the biggest corporate failure in the country’s history.
