Page last updated at 09:11 GMT, Thursday, 24 September 2009 10:11 UK

UK queries Magna's Vauxhall plan

Lord Mandelson
Lord Mandelson has spoken to Neelie Kroes about his concerns

UK Business Secretary Lord Mandelson has said he does not believe Magna International's plan for Opel is "commercially the most viable".

In a letter to the European Competition Commissioner Neelie Kroes, Lord Mandelson said Magna's plan was more expensive than that of a rival bidder.

Canadian car parts maker Magna was chosen by General Motors earlier this month to buy Opel and Vauxhall.

There are fears that 1,100 jobs at Vauxhall could be lost under the plan.

Magna's co-chief executive Siegfried Wolf has signalled that the Canadian firm may cut as many as 10,500 jobs at Opel and Vauxhall in Europe.

About 4,000 of the cuts would be made in Germany.

A spokesperson for the Department for Business, Innovation and Skills confirmed Ms Kroes had spoken to Lord Mandelson since receiving the letter.

Lord Mandelson urged the European Commission "to ensure a commercially-based outcome rather than one determined by political intervention and subsidies".

Magna is seeking 4.5bn euros (£4.5bn; $6.5bn) from the German government, which Lord Mandelson says is more than a bid from investment group RHJ International would have cost.

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