Vauxhall factories safe

Posted on 14 Oct 2009 by The Manufacturer

Magna, the new owner of GM Europe, has agreed to keep both the UK Vauxhall plants open until at least 2013 with a view to ongoing production at the sites thereafter.

The Canadian auto parts manufacturer which has backing from the Russian Sberbank has also agreed that there will be no compulsory redundancies inflicted upon Vauxhall workers who have agreed to a two year pay freeze.

“Following extensive and constructive dialogue between Vauxhall Motors, Magna International, Unite and the British Government, we are pleased that the parties have secured an agreement that protects the jobs and prospects of the 5,000 Vauxhall staff in the UK,” read a Vauxhall statement.

“Both the Ellesmere Port and Luton manufacturing operations will retain security of production [and] maintained as a key manufacturing operation until at least 2013, with consideration given to a future model at the plant beyond that date.”

Lord Mandelson will now negotiate with the German government over how much Britain will contribute to the £4bn state aid package that German Chancellor Angela Merkel agreed to put up for Magna. This was seen as instrumental in securing the deal and in return Magna has agreed to keep all German factories open and limit staff reduction in the country. It is believed the UK will put up around £400m in loan guarantees.

“I need to be convinced that the terms and conditions for the financing will be of the sort and standard that the Government expects when we put the taxpayer money into a company like this,” said the UK business secretary. “We don’t sign a blank cheque.”