Government is providing General Motors Europe with a £270m ($300m) loan guarantee in a bid to secure the future of Vauxhall operations in the UK.
The guarantee is provided under Government’s Automotive Assistance Programme and is part of package of support provided in conjunction with The US and European – principally German – governments.
Announcing the deal last Friday, Business Secretary Lord Mandelson said: “I always said the Government would stand foursquare behind Vauxhall and with this announcement today we have kept our word. These are excellent plants employing a first rate workforce.
“We need Vauxhall to thrive as part of Britain’s automotive manufacturing base and following our negotiations with GM Europe I am confident it will do so.”
General Motors said it was looking for around 2bn euros in loan guarantees from European governments after announcing that it will invest 1.9bn euros itself.
This is after it reneged on a deal to sell the European operations to Canadian car parts maker Magna at the 11th hour in November. Around 60 per cent of the former sum is expected to come from Germany which is home to Vaxhall’s sister marquee Opel and more General Motors Europe employees than any other European country.
Vauxhall employees around 4,500 people in the UK across its Ellesmere Port and Luton plants and its head office and administration facilities. It announced last year that 350 people are to be made redundant from Luton.