Vauxhall uncertainty continues as bid meeting stalls

Thousands of workers at Vauxhall in the UK will have to wait to see who is being lined up as the carmaker’s new owner after a key meeting ended today with no decision.

The German government was due to name its preferred bidder for the European arm of the beleaguered US giant General Motors (GM) following all-night talks featuring German chancellor Angela Merkel and other top-level figures.

But the meeting broke up with Germany’s economics minister saying that one of the three bidders for the division had pulled out and both remaining potential suitors needed more information from GM and the US Treasury before a recommendation could be made.

Italian car giant Fiat and Canadian car parts maker Magna International are the two remaining bidders for the Vauxhall and Opel businesses, Karl-Theodor zu Guttenberg said, following the withdrawal of US investor Ripplewood Holdings.

Mr zu Guttenberg also said Germany did not yet have the security it needed to provide billions of dollars worth of loan guarantees for Opel, a move which gives the country most influence in deciding the division’s new owner.

Any deal for GM Europe will have an impact on staff at Vauxhall’s UK factories in Luton, Bedfordshire, and Ellesmere Port, Cheshire, which employ a combined total of around 5,000 people.

There are fears the German government could give in to election-year pressure with a pledge to protect domestic jobs at the expense of those in the UK.

Berlin’s opinion is important as it is being asked to make billions of euros worth of loan guarantees as part of any deal. Opel also has its headquarters in Germany, where half of the firm’s 25,000 workers are based.

The UK's Business Secretary Lord Mandelson acknowledged yesterday that UK jobs could be lost as part of the restructuring.

He has held talks with the main bidders about their commitment to continued production in the UK and offered to consider “financial underwriting” of any new arrangements.

But Lord Mandelson acknowledged that the GM Europe workforce as a whole could be reduced in future as part of a “consolidation” of the firm’s production capacity.

Tony Woodley, joint general secretary of Unite, said last night the UK government was “not doing enough” to help the 5,000 Vauxhall workers.

“There is no bidder who won’t at the end of the day close plants somewhere,” he said.

“And there is no bidder who won’t require billions of euros, of pounds, from governments to keep this new company going and alive.

“That is why it is so crucial that we don’t sit back on the sidelines allowing the German government or somebody else to look after our plant’s interests.”

He added: “If you are asking me, is this government physically, genuinely, actively doing enough, then the answer is definitely no.”

But Lord Mandelson rounded on the union chief, saying: “I have been working very hard for the last three or four months on the issue of General Motors’ future in Europe.

“I haven’t had a single conversation with Tony Woodley during that time and he has showed no interest at all in the issue.

“He now realises that we are coming up against a crucial deadline for Opel in Germany and has now decided to jump into the television studios and sound off against me.”

The sale of GM’s European arm is part of the reorganisation of the US carmaker, which is battling to avoid bankruptcy.

Pressure to agree on a partner is building ahead of a June 1 restructuring deadline for GM set by the US government, which could lead to a Chapter 11 bankruptcy filing by the Detroit-based carmaker.