Vauxhall workers await fate

Fiat has pulled out of GM Europe takeover talks which are crucial to the survival of its US parent company and therefore British jobs at Vauxhall. The Italian car maker has blamed the German government for being "unreasonable" over negotiations, but Germany has claimed it needs more money from the takeover as GM in the US has asked for more cash. But GM Europe's future is further complicated by the state of its parent company. Washington is expected to declare Chapter 11 bankruptcy on Monday, so the deadline for a GM Europe deal - a key part of the troubled American car group's plans to restructure its business - is tight. But with Fiat pulling out, leaving only Canadian car parts manufacturer Magna as the other bidder, it is now doubtful if they will go ahead at all. The negotiations are seen as crucial in securing British jobs at Vauxhall plants in Luton and Ellesmere Port. Lord Mandelson has insisted he has already received "categorical" assurances that Vauxhall production will continue in the UK, but questions have been raised about why the UK Government has not been represented in German negotiations on bailing out the German GM division, when the outcome could seriously affect UK jobs. Jobs at Opel plants in Germany and Belgium are also at risk and the European Union is holding urgent talks on the matter, with Trade Minister Gareth Thomas is in Brussels to represent Britain's interests. The commission has to approve the terms of any deal German Chancellor Angela Merkel reaches if it involves state aid. Only a fortnight ago the Commission met GM bosses and car industry officials ministers from 12 EU countries, including the UK. Commission vice-president Gunter Verheugen spoke then about the need for any restructuring of GM Europe to "fully respect EU rules".

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ITN | May 29, 2009

Tags:. .unreasonable. .mandelson. .fortnight. .bidder. .categorical