Government agrees £270m Vauxhall deal
Saturday 13 March 2010
The government yesterday announced £270m of loan guarantees for Vauxhall as part of GM Europe's huge restructuring plans.
The loan guarantees come after more than a year of talks between the department for Business, Innovation and Skills, and the company. GM Europe is also in discussion with the governments of other European counties, and sees the deals as crucial to its survival.
Vauxhall has plants in Ellesmere Port in Cheshire and Luton in Bedfordshire.
"I always said the Government would stand four-square behind Vauxhall, and with this announcement today we have kept our word," the Business Secretary, Lord Mandelson, said. "These are excellent plants employing a first-rate workforce. We need Vauxhall to thrive as part of Britain's automotive manufacturing base and following our negotiations with GM Europe I am confident it will do so."
The group's troubled American parent had announced plans to sell off its European operations, including Opel in Germany, last year, before back tracking and asking for assistance to restructure the group.
GM said last week that it had invested €1.9bn in Vauxhall and Opel, but that it also needed an extra €2bn in loan guarantees. More than half is expected to come from Berlin.
Both Vauxhall and the Government said yesterday that the loan guarantees have not been agreed in order to prevent jobs losses, or production cuts.
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