UK government insists Vauxhall plants are safe whoever buys the company
27 May 2009

Vauxhall's plants in the UK will remain open following the company's sale, according to the government's business secretary Lord Mandelson.

Parent company GM is expected to reveal its preferred bidder for Vauxhall and Opel imminently, as it prepares to sell them off.

Click here to read 'Vauxhall/Opel talks break down'

Late on Wednesday night Lord Mandelson, the business secretary, revealed to the Guardian newspaper that he had secured assurances from the three main bidders for General Motors Europe that Vauxhall car production would "continue indefinitely" in the UK.

There are three frontrunners to buy Vauxhall and Opel: Fiat, Canadian parts maker Magna and Belgian private equity firm RJH. Beijing Automotive Industry Corporation (BAIC) has also made a bid for the company. Unconfirmed reports suggest Fiat's bid is the least likely of the three front-running options to be accepted.

"They have each assured me that Vauxhall provides a vital source of production and vital market share for GM Europe and see Vauxhall production in the UK continuing indefinitely," Mandelson said.

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However, Mandelson was unable to guarantee that the jobs of all of Vauxhall's 5000 workers would be safe.

"GM Europe suffers from overcapacity and from oversupply in a market that is going to take a long time to come back to previous levels of demand," said Mandelson. "Therefore, whatever the ownership changes which take place, GM Europe, including Vauxhall and Opel, will be facing major challenges. We have to be realistic about that, while doing whatever we can to support Vauxhall's interests and its workforce in the UK."

Tony Woodley, the joint general secretary of the Unite union, said Mandelson should "get off the phone and get on a plane" to secure the future of the 5000 Vauxhall workers.

The UK government has said it will join the German government in providing financial support to Vauxhall and Opel if, as expected, it files for bankruptcy protection before the sale is complete.

Britain's state support is conditional upon several factors, including that the new owner make a commitment over the two British plants in Luton and Ellesmere Port.

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