Business secretary warns of inevitable cost-cutting at Vauxhall and Opel
21 May 2009

Business secretary Peter Mandelson has warned a takeover of GM Europe will result in a "painful change".

He warned this would happen regardless of who wins the bidding for the European arm of General Motors, which also owns Vauxhall.

"Whoever comes out as the successful bidder will cut costs and consolidate," he told the BBC.

"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 am working for."

Blog: Vauxhall's electric future

It is feared that a takeover by Fiat would lead to job cuts and closures in the UK because factories in Germany and Italy would be protected by government and union interventions.

Lord Mandelson also rejected criticism that the UK scrappage scheme was mainly helping overseas manufacturers, as so many of cars sold in the UK are imported.

He said that many cars sold in European countries with similar scrappage schemes use British-made components.

"We are all helping each other," he said.

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