Page last updated at 23:32 GMT, Monday, 16 November 2009

New talks set on Vauxhall future

vauxhall plant
Workers at Ellesmere Port have been frustrated by the sale talks

General Motors' head of operations in Europe is set to meet the UK government and Unite union to talk about Vauxhall.

Opel chief Nick Reilly will hold meetings with Business Secretary Lord Mandelson and Unite head Tony Woodley.

It is the first face-to-face meeting between GM bosses and ministers since the US firm decided not to sell Opel.

GM has indicated it plans to cut about 10,000 jobs in Europe. Lord Mandelson will want to clarify its plans for its plants in Luton and Ellesmere Port.

Mr Reilly said all the European plants would know their fate in the next fortnight.

"We know it is disturbing and unsettling to have this hanging over your head for such a period of time and so we intend to take that decision in a relatively short period of time, approximately two weeks or so," he said after a meeting in Belgium.

BBC business reporter John Moylan said he understands Mr Reilly, a former Vauxhall chairman, will meet Unite head Mr Woodley on Tuesday morning and Lord Mandelson later in the afternoon.

Job concerns

Lord Mandelson will want discuss GM's intentions for the Luton and Ellesmere Port factories - which GM has described as "lean and efficient".

Our reporter says it is understood Mr Mandelson and GM chief executive Fritz Henderson have spoken on the phone several times since the Opel sale was cancelled.

Mr Reilly is expected to outline his proposals for Vauxhall as part of a turnaround plan for Opel in Europe.

The government has said it will consider financial support for the carmaker, though any decision on funding is thought to be weeks away.

The union will seek to clarify what impact those cuts could have in the UK, where Vauxhall employs 5,500 people.

Mr Woodley will be seeking firm assurances over the future of the UK's Vauxhall plants, but is also likely to come under pressure to agree to cost savings.

Last month, he agreed a deal with Canadian car-parts maker Magna - who had agreed to buy Opel - which would have resulted in just a few hundred jobs losses initially.

GM first said in March that it wanted to offload Opel, which includes Vauxhall, when the US firm entered a period of bankruptcy protection that eventually saw it emerge with the US government as its biggest shareholder.

After months of negotiations, GM finally agreed to sell the brands to Magna in September, with the German government pledging Magna 3bn euros in loan guarantees on top of the existing bridging loan.

GM cancelled the sale earlier this month, because of "an improving business environment for GM over the past few months".

The carmaker said on Monday it would start paying back its government loans earlier than expected, making its first payment of $1.2bn (£717m) to the US government in December.

GM had not been required to begin repaying the loan until 2015.

Opel employs a total of 54,000 workers across Europe, with 25,000 based in Germany.



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