Vauxhall has been boosted by the news that its US parent company General Motors has will invest £1.7bn in its European business.
At the Geneva Motor Show last week GM Europe chief executive Nick Reilly said the investment “should clearly signal our determination to fix our business.”
General Motors was planning to sell its European operations – primarily consisting of Opel and Vauxhall – but in November last year changed its mind at the 11th hour after a deal had been struck with Canadian car parts maker Magna.
The firm said at the time that it reneged on the deal having decided that its European business would be key part of its regrowth after recession. This investment seemingly backs that mindset.
Said Reilly: “Our call for the additional funding was approved by GM’s senior management and supported by the GM board of directors.
“We hope that our strong commitment will be well received as a major milestone in our ongoing discussions about Government guarantees to cover the remaining gap.
“We greatly value the much-increased support from GM, particularly given the high-priority demands on their liquidity.”
Ed Whitacre, recently promoted to chief executive of GM from his previous role as chairman, added: “Beyond the purely financial aspects, we see this as a major step towards instilling renewed trust and confidence into Opel/Vauxhall’s customers, employees, business partners, unions, dealers and European governments.”
Vauxhall employs around 4,500 people between its Luton and Ellesmere Port plants in the UK.