General Motors is planning to axe 10,000 jobs in its European division, following its shock decision yesterday to abandon its sell-off of the company to parts giant Magna.
Group vice-president John Smith said that the job losses would be part of a push to trim GM Europe's costs by up to 30 per cent. But workers at the group's largest European manufacturer, Opel, have voted to strike in protest at GM's last-minute U-turn.
The announcement is likely to halt the euphoria of UK workers and unions, who greeted yesterday's change of heart on the deal as a life-saver for factories in Luton and Ellesmere Port.
Smith added that GM still hopes to secure government backing in the countries where its European car plants are based. He also attempted to explain the reasoning behind the firm's change of position.
"Try as we might to fashion a deal with Magna and Sberbank that would retain a close tie with General Motors over time, there was really no guarantee that would be the outcome and that sort of leaves potentially a pretty big strategic hole for General Motors to deal with," he said.
"It was a coin toss in August, it was a coin toss in September and a coin toss of a kind in November and all along the way I think our board was acquiring a better understanding of the business," he added.