Mandelson 'assured' of Vauxhall future in UK

The Business Secretary Lord Mandelson today said he had been given "categorical" assurances that Vauxhall production would continue in the UK and insisted that the Government had been "very pro-active indeed" in an attempt to save workers' jobs.

He said the ownership issue would be resolved "quite shortly" after thousands of workers were left waiting to see who is being lined up as the carmaker's new owner when a key meeting ended with no decision earlier today.

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 without agreement, leaving Italian car giant Fiat and Canadian car parts maker Magna International as the two remaining bidders for the Vauxhall and Opel businesses.

Workers' union Unite accused the UK government of "not doing enough" to help the 5,000 Vauxhall workers.

But Lord Mandelson told GMTV: "The ownership issue has got to be resolved and I think that will be resolved quite shortly."

He said he had been working on the case "every day for the last three months" and added: "We've been very pro-active indeed."

Asked why the UK Government was not represented at the meeting, he said: "I don't think the German government would have welcomed my presence at a table in which they were being asked to bail out their own German division of General Motors.

"Where we have an interest, and it's a very big interest indeed, is in ensuring that when the ownership of General Motors changes, as it will do, that there is a continuing and firm commitment to Vauxhall production here in the UK.

"And I have received assurances from all those involved in the negotiations that there will be a continuing commitment to Vauxhall and its workforce in the UK.

He added that "some British government support" would be needed once the ownership issue has been resolved.

Later, he told BBC News that both potential suitors had given him "a categorical assurance" that "they will see a continued commitment to production and employment by Vauxhall here in the UK".

Asked about fears that 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, he said: "The reason why that is not going to happen is because Vauxhall's production in the United Kingdom provides one of the main revenue and profit streams for General Motors Europe.

"There's no question of that simply being dispensed with."

But Lord Mandelson acknowledged yesterday that UK jobs could be lost as part of the restructuring.

As the meeting ended earlier today, Germany's Economy Minister Karl-Theodor zu Guttenberg 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.

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 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.

Unite joint general secretary Tony Woodley said: "It's now crucial that the Government finishes the job that it's been working on with ourselves for months now, and that's to be at the meeting table when the final decisions for the ownership and future of our plants and jobs are made.

"We also need to make sure that we put British money up in the way that the Germans have done and the Spanish will do. It will take billions of pounds and euros to make sure that the new company will continue to build.

"They've put billions of our money into the banks and it's no good doing that if the banks themselves do not support businesses. We need to protect jobs and make sure that people do not go onto the dole, which costs more, and make sure that people with jobs keep their homes."

He said the manufacturing industry is a "crucial part" of the British economy, accounting for up to 900,000 jobs and 19 per cent of gross domestic product.

Woodley: "Now we're into a situation at the sharp end where they're going to decide who's going to own the company, and they're going to decide which plants close.

"It's crucial that we don't allow another any other government, Germany where they are up for re-election, to drive a plan which will reflect German interests more than everyone else's.

"They will be thinking strategically about manufacturing, not just for the next two years but the next 25 years."

Lord Mandelson told BBC News he was following the progress of negotiations in the US "very carefully indeed".

"I was in touch again by phone with both bidders - as recently as this morning in the case of one," said the Business Secretary.

"I think we will know before too long and the position of the British Government is essentially neutral between these two bidders.

"I know that the British trade unions have expressed a preference for Magna over the Fiat bid. I understand why they are expressing that preference.

"Both bids envisage a continued commitment to Vauxhall, but equally both bids involve a change to the company's operating divisions, not just here but in Germany and other European countries as well.

"These are talks we will have with them once we know the outcome of the negotiations between the headquarters in the US and these two bidders, and I think we will not have to wait too long before we know what that outcome is."