Page last updated at 17:18 GMT, Thursday, 11 June 2009 18:18 UK

Mandelson seeks Vauxhall pledges

Business Secretary Lord Mandelson
Lord Mandelson said Magna has ambitious plans for GM Europe

Business Secretary Lord Mandelson has met German ministers and the boss of car parts firm Magna to discuss the future of Vauxhall in the UK.

"We are negotiating to keep Vauxhall production and employment continuing in Britain, and with a secure, viable future," Lord Mandelson said.

He described the discussions with Magna as "good" and "positive".

Magna is the firm most likely to take over General Motors Europe, which owns Opel in Germany and Vauxhall in the UK.

Separately, reports on Thursday suggest that Swedish sports carmaker Koenigsegg and Norwegian investors have agreed a deal to buy Saab, also owned by GM Europe.

'Ambitious plans'

Lord Mandelson said: "Magna understands the very real concerns that we have regarding Vauxhall in the UK."

He added that the UK government and Magna would now move to "technical discussions between experts" that would begin next Monday.

He said that "many technical details needed to be sorted out" before any specific commitments could be made on Vauxhall jobs.

Lord Mandelson also said that Magna had "ambitious" plans for GM Europe.

For his part, Magna boss Siegfried Wolf talked of his "respect for British workers".

Vauxhall employs 5,500 at two plants in the UK, at Luton and Ellesmere Port.

There are concerns that UK jobs may be seen as more expendable than German jobs because the German government has said it will provide billions of euros of loan guarantees to the company that takes over GM Europe.

It agreed a deal at the end of last month to back Magna, the Canadian car parts maker, in its attempt to take over Opel in Germany. Other bidders included Italian carmaker Fiat.

Opel employs more than 25,000 workers in Germany and the German government was keen to protect as many of these jobs as possible, particularly in light of the upcoming political elections in the country. It is expected to provide a loan facility of 1.5bn euros ($2.1bn, £1.3bn) on top of the loan guarantees.

Unions had criticised Lord Mandelson, saying he had been on the periphery of discussions concerning the future of Vauxhall, and the UK government, unlike its German counterpart, has made no specific financial commitments to safeguard the carmaker's future.

The business secretary defended himself by saying that he had received commitments from Magna about continuing production at UK plants.

Bankruptcy filing

GM Europe's parent company, General Motors, has suffered a massive drop in sales during the global economic downturn and was forced to file for bankruptcy protection at the beginning of June.

Its bankruptcy filing said that its current debts totalled $173bn.

GM has received $20bn in emergency loans from the US government, and will receive a further $30bn following the filing.

It is selling off a number of brands to raise cash and stem its losses.



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