The Government has made a last-minute appeal to the carmaker GM not to close its Vauxhall plant in Ellesmere Port, Cheshire, in an attempt to prevent the loss of the 2,100 jobs there.
Vince Cable, the Business Secretary, returned yesterday from a flying visit to New York, where he pleaded with GM bosses to spare Ellesmere Port when the global car giant slims down its European operations shortly.
His decision to travel to the US reflects his serious concern that the plant could be at risk. UK industry analysts believe GM will combat over-capacity in Europe by axeing two plants – possibly one in Bochum, Germany, and another in either Spain or Britain, which leaves the Cheshire factory vulnerable. "We could be at the sharp end of it," one analyst said.
A closure announcement would be damaging for the Government, especially as it could be made around the time of the Budget on 21 March. Amid signs that the UK may escape a double-dip recession, George Osborne, the Chancellor, will set out measures to boost growth, including a credit easing scheme to provide loans to small and medium-sized firms.
Ministers would blame the ending of car production at Ellesmere Port on global factors beyond their control. GM has shed thousands of jobs in America and is now said to be ready to "bite the bullet" in Europe to stem losses on the continent which rose to $747m last year.
GM has dismissed fears about Ellesmere Port as "speculation." There is a legally-binding agreement with the trade unions to support production there until 2014, although that would not necessarily prevent a closure being announced this month, with car-making run down over the next two years.
Mr Cable had what aides called "a very constructive meeting" in New York with Dan Akerson, GM's chairman and chief executive, and vice-chairman Steve Girsky.
One source said: "Both Mr Girsky and Mr Akerson were engaged and receptive. They were pleased that Vince Cable had gone to New York to make the case to them in person."
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