Friday, May 22, 2009
Mandelson warning over Vauxhall
Business Secretary Lord Mandelson has told the BBC that there will be "painful change" resulting from the takeover of GM Europe.
This, he said, would be inevitable whichever of the three bidders for the European arm of General Motors, which owns Vauxhall, takes over.
"Whoever comes out as the successful bidder will cut costs and consolidate," he said.
He also said he was working hard to secure the future of Vauxhall's plants.
"We have to ensure that productive plants, where the greatest percentage of sales take place and which include UK Vauxhall plants, have a secure future," he said.
"That is what I working for."
Car scrappage
Lord Mandelson also rejected criticism that the UK car scrappage scheme, introduced on Monday, was helping overseas car manufacturers since so many cars sold in the UK are imported.
He said that many cars sold in Europe, where similar schemes have been introduced, have British components.
"We are all helping each other," he argued.
He also rejected the suggestion that the UK scheme is being used primarily by rich car owners.
The scrappage scheme offers motorists £2,000 to trade in a car that is more than 10 years old for a new one.
Bidding war
Three suitors have submitted bids to buy a stake in GM Europe.
General Motors did not name the three companies but Italian carmaker Fiat and Canadian parts maker Magna have declared their interest.
US investment firm RHJ International is also widely reported to be in the running.
Vauxhall employs 5,000 workers in the UK at two plants, one in Ellesmere Port in Merseyside, which produces cars, and another at Luton, which produces vans.
GM Europe had admitted that it needs £3bn and could face a cash crisis by the end of June.
The deadline for bids for GM's European business closed at midnight.
DATED: 22.05.09
FEED: AW
