Job cuts announcement worries Vauxhall workers

Jim Armitage
14 Sep 2009

The new owners of Vauxhall/Opel tonight sent fear through the 5000-strong UK-workforce when they said they expected to make 10,500 job cuts across Europe.

Of those, about 4000 are in Germany, with the rest coming from other plants elsewhere.

While Siegfried Wolf, co-chief executive of car parts group Magna, did not comment on the future for workers at plants in Luton and Ellesmere Port in Cheshire, unions fear the toll will be high.

Predicting about 800 cuts here, unions have already described Magna's success in bidding for General Motors' European operations as the worst outcome for British workers.

However, the news — or lack of it — for the UK could have been worse. Wolf said the only plant that might be closed outright was the Antwerp site in Belgium.

He was were speaking after UK trade minister Lord Mandelson urged the European Commission to reject any proposals from Magna that looked like a “political fix”.

This referred to concerns that German workers might be spared in return for the 4.5 billion
(£3.9 billion) of state guarantees offered to Magna by Angela Merkel's government.

“There will be some tough and detailed negotiations that lie ahead and it's very important that the European Commission takes a role and a hand in these negotiations,” Lord Mandelson said.

Wolf said he expected to invest about 1 billion every year in the new company. Magna hope to turn the struggling business around in the next five years.

Critics of the sale have expressed concerns over how the deal might weaken Magna's own finances, possibly to jeopardise the future of Vauxhall/Opel. They argued that Magna's car parts clients, who include other big manufacturers, would not want to do business with Magna any more.