Page last updated at 16:45 GMT, Monday, 14 September 2009 17:45 UK

Magna could axe 10,500 Opel jobs

A sign outside an Opel plant in Germany
Magna was Germany's preferred bidder for Opel

Canadian car parts manufacturer Magna may cut as many as 10,500 jobs at Opel and Vauxhall in Europe.

The cuts could take more than a year to implement, said Magna's co-chief executive Siegfried Wolf in Frankfurt.

He said about 4,000 job losses would be made in Germany. This is more than originally proposed, says the BBC's Berlin correspondent Tristana Moore.

General Motors (GM) said last week it had agreed to sell 55% of its European units Opel and Vauxhall to Magna.

The car parts maker was the German government's preferred bidder, as it said it would keep all four Opel plants in Germany open.

Loan guarantees

The German government's offer of substantial financial backing to Magna helped sway the sale in its favour.

It was seen as a victory for Chancellor Angela Merkel.

Germany has already lent 1.5bn euros ($2.18bn; £1.31bn) to Opel, and will now put up an additional 3bn euros in loan guarantees for Magna, thus safeguarding thousands of German jobs, just weeks before the national election.

Mr Wolf said it would not take Magna long to pay back the loans.

"By 2015 we want to pay back the government-guaranteed loans. Opel will be profitable before that, however," he said.

Opel employs a total of 54,500 workers across Europe, with 25,000 based in Germany.

British unions have expressed concern about the long-term future of Vauxhall's 5,500 UK workers and its two British plants in Luton and Ellesmere Port.

Magna has also suggested shifting some production from a plant in Zaragoza in Spain back to Germany.

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