Page last updated at 19:08 GMT, Wednesday, 18 February 2009

Europe cool on GM calls for help

Vauxhall cars for sale
It is not yet clear whether Vauxhall will be affected by GM's plans

The UK, Germany and Sweden have reacted coolly to calls for $6bn (4.2bn) of aid from US car giant General Motors.

The UK said it was still considering the details. Chancellor Angela Merkel called for a plan for GM's German Opel brand before aid could be considered.

Swedish industry minister Maud Olofsson said it was up to the US carmaker to save its Sweden-based unit Saab.

GM said that it needed billions of dollars from several governments outside the US.

A spokesman for Britain's Department for Business, Enterprise & Regulatory Reform said: "We are continuing to discuss the implications of the plan with the company, although there is no specific detail as yet on how it might affect Europe, and how we can continue to help GM in the UK."

In a separate development on Wednesday, Volkswagen said it had received two billion euros ($2.5bn) from Germany's bank rescue fund to improve the availability of credit for car loans.


Swedish industry minister Maud Olofsson
They have in practice removed their hands from Saab
Maud Olofsson, Swedish industry minister

General Motors said on Tuesday it would cut 47,000 jobs around the world by the end of the year, including 26,000 outside the US.

It is not clear how many jobs will be eliminated in western Europe, where GM employs about 50,000 workers, or whether any plants will be closed.

The carmaker said it is talking to unions about ways to reduce costs by $1.2bn. Measures could include closing or selling off plants "in high cost locations".

GM's UK subsidiary, Vauxhall, employs 2,000 people at Ellesmere Port in Cheshire and 1,400 at Luton.

Short-time working was introduced there this week and Vauxhall said negotiations with unions on restructuring were continuing. It said results were expected though, in "months not weeks".

Nikki Rooke from the Society of Motor Manufacturers and Traders, however, said the latest developments did not necessarily mean bad news for UK workers.


"Obviously it is a very worrying situation, but there is a difference between GM operations in the US and Vauxhall in the UK, and really GM across Europe," she said.

"What we're doing is talking to government at the moment to see what can be done to really support the automotive jobs within the industry in the UK, looking at how those producing in the UK can access finance and credit and also what UK government can do to really boost demand."


Ms Olofsson said she was "deeply disappointed" in General Motors.

"They have in practice removed their hands from Saab... they are handing over responsibility to Swedish taxpayers."

For its German-based Opel business, GM Europe (GME) said that management and unions were in talks to see whether forced redundancies and plant closures could be avoided.

"Management is willing to consider strategic third-party partnerships, alliances and equity stakes in case such an approach is seen as beneficial for GME and Opel's/Vauxhall's viable and sustainable future," it said.

'Necessary concepts'

Germany said GM should come up with a plan for Opel if it wanted to get state support.

Cash aid sought - $16.6bn
Job cuts - 47,000
Production cut - 5 plants
Sales target 2009 - 11.5 to 12m
Car models axed - 12
Source: GM

"At the moment, politicians can't do anything because the necessary concepts from Opel are not available," Mrs Merkel said on Wednesday.

"And that can't happen without the parent company in Detroit."

The uncertain future of GM's European businesses outraged its workers.

"Opel makes a profit, and we had a profit last year as well," said Francisco Jimenez, an Opel worker and IG Metall union official in Ruesselsheim, Germany.

"Nobody on the outside knows that - they just always think that since the parent is falling apart that Opel is also bloody rubbish."

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