Car industry faces fresh turmoil

Car manufacturers are under pressure to cut jobs

Union officials at BMW's new Mini plant are to meet on Monday to consider strike action after workers narrowly rejected the company's latest pay and productivity deal.

Workers at the Cowley plant rejected the two-year deal, which would have made them among the highest paid car workers in Europe, by just 46 votes.

All the signs are pointing to a positive answer from the European Commission

Carlos Ghosn, Nissan president

BMW told its workforce in a letter that the result has put future investment in the plant under threat, according to a report in Sunday Business.

A spokesman for the Transport and General Workers Union (TGWU) said: "Shop stewards will be meeting on Monday to discuss whether to take strike action or whether to go back to the company first."

Meanwhile, workers at Sunderland's Nissan plant must wait a further two weeks to find out if their jobs are safe.

Blair 'intervenes'

Nissan president Carlos Ghosn said the company was still waiting for the European Commission to announce whether it would clear a £40m grant from the British government to produce the new Micra at the plant.

"The decision by Nissan will be made in two weeks time.

"You will know the decision, why we have taken it and what we are expecting for the future," Mr Ghosn told a press conference in Tokyo.

"All the signs are pointing to a positive answer from the European Commission, but we are still waiting for an formal decision regarding the grant," he added.

Concern over Nissan's commitment to the Sunderland factory, which currently makes the Micra, the Primera and Almera models, has been fuelled by the strength of the pound against the euro, making exports to Europe from the plant more expensive.

There has been contact at all levels of Government with a view to keeping production of the Micra in the UK

Downing Street spokesman

The plant employs 5,000 people directly and thousands more in the supply industry.

Its closure would lead to economic disaster for the region.

Prime minister Tony Blair, whose Sedgefield constituency is close to the Sunderland plant, is understood to have twice spoken to Mr Ghosn by telephone to make the case keeping it open.

A Downing Street spokesman said: "There has been contact at all levels of Government with a view to keeping production of the Micra in the UK."

The government was "pretty confident" that the European Commission would approve the grant, he added.

Highest productivity

Local MP Fraser Kemp and Amalgamated Engineering and Electrical Union (AEEU) representatives were due to travel to Brussels on Monday to lobby the Commission over the grant.

An AEEU spokesman said: "Everyone is very anxious. Nissan's decision seems to be hanging in the balance."

He said the Sunderland workers were proud of the fact that the plant has the best productivity in Europe.

Carlos Ghosn is confident of receiving state aid

And a new seven-day working agreement would further boost output.

"This new plan will make Nissan more money than than any other plant in Europe," he added.

A final decision on the grant is expected on Wednesday.

Japan's second-largest carmaker has been weighing up whether to produce the new Micra at another Nissan plant in Europe, possibly Barcelona, or even at a Renault plant in France.

Renault holds a controlling 36.8% stake in the Japanese carmaker.

Vauxhall hopes

The TGWU was also expected to step up its campaign to keep General Motors' Vauxhall plant at Luton open on Monday.

My preference is for the new Vectra to be built at Ellesmere Port

Mike Burns, Vauxhall's European chief

GM announced in December that production of the Vectra would end there, with the loss of 2,000 jobs.

Hopes that production of the new Vectra would be in the UK, were raised last week by Mike Burns, head of European operations for Vauxhall parent company General Motors.

It seems the company would like the car to be produced alongside the Astra, which is approaching the end of its life, at the company's Ellesmere Port plant in north west England, rather than build it at GM's factory in Antwerp, Belgium.

"My preference is for the new Vectra to be built at Ellesmere Port," Mr Burns said at the Detroit Motor Show, the Daily Telegraph reported.

But the decision depends on how Vauxhall chief executive Nick Reilly and unions work together, Mr Burns was reported to have said.

A decision is expected by the middle of February.