Decision closer over 5,000 Vauxhall jobs

A long-awaited decision on the future of thousands of British car workers' jobs could come a step closer today when the board of motor giant General Motors meets to consider bids for its European arm Opel.

Around 5,000 jobs at Vauxhall factories in Luton and Ellesmere Port will be affected by the sale.

Canadian car-parts group Magna and Belgian finance firm RHJ International are bidding for GM's European arm.

Business Secretary Lord Mandelson today urged the GM Board to take an "objective, commercial decision" about the future of its European operating divisions.

"This decision, above all, needs to secure the long term viability of both Opel and Vauxhall in the UK and should be not be distorted by political considerations in any one country.

"The UK Government has asked the GM board to take full account of the relevant interests in all European countries as this will shape the public funding decisions by all the member states and state aid approval by the European Commission."

The German government is backing a joint bid from Canadian car parts maker Magna and Russian bank Sberbank, offering almost £4 billion of finance.

Berlin has championed the Magna bid because it has given guarantees not to shut down German plants, which employ 25,000 workers, but UK ministers have been pressing for a "commercial" decision to be made rather than one influenced by politics.

The car marques are being sold by the United States giant as GM seeks to return to a firmer financial footing after emerging from US bankruptcy.

Union officials fear that more of Vauxhall's 5,000 UK workers will lose their jobs under Magna ownership than if RHJ buys the business.

There have also been reports that the Canadian company has proposed closing the firm's final salary pension schemes to all workers in the UK and the rest of Europe.

German Chancellor Angela Merkel's government is believed to want a deal finalised before the September 27 general elections.

The GM Trust also has to meet to consider the bids, so a final decision might not come until next week despite today's meeting of the board in Detroit.