Business secretary Peter Mandelson has questioned the viability of Magna’s takeover of Opel/Vauxhall from General Motors.
In a letter to European competition chief Neelie Kroes, which was obtained by the Financial Times, Mandelson said the takeover would be too expensive and open to political intervention.
“We do not believe the case has been demonstrated that the current Magna proposal is commercially the most viable plan,” he said in the letter which was sent on Tuesday.
“Capacity at highly efficient plants in Britain and Spain is planned to be under-utilized, in favour of higher utilization of some of GM's other less-efficient plants.”
Magna plans to cut Opel’s 50,000-strong workforce by 10,500. It will receive 4.5 billion euro (£4.1bn) from the German government in aid, but the European Commission confirmed in a statement it would investigate whether the aid was offered in return for keeping German plants open.
Mandelson urged the commission to urged to "ensure a commercially based outcome rather than one determined by political intervention and subsidies".