Vauxhall's 5,000 staff may have to wait another three agonising months before finding out if their jobs have a future, the car maker's parent company, GM Europe (GME), has warned.
The Canadian car parts giant Magna International – with funding from Russia's Sberbank – became preferred bidder for GME last week, just days before the parent company filed for Chapter 11 bankruptcy protection in the US.
There are few details about Magna's plans to address overcapacity at GME, which includes Vauxhall in the UK and Opel in Germany. Magna has said that 2,500 jobs will go from Opel's 25,000-strong workforce in Germany, but British staff are unlikely to hear about their jobs until the final contract is signed. With due diligence on the company just beginning, a provisional agreement is not expected until next month and a final deal not until September.
Vauxhall workers have already faced months of uncertainty since GM started tottering in the US last autumn. Frantic negotiations last week unhitched the European operations before the parent company's bankruptcy, and a €1.5m (£1.3m) bridging loan from the German government to GME is in place to keep the company going until the Magna deal is agreed.
The British and German governments are expected to put as much as £5bn into the company as part of the takeover. Both are keen to secure jobs in their own countries in return for the investment. But Berlin will pay the lion's share – proportional to Opel's much larger German presence – leaving sceptics warning of potential massive job losses in the UK. Optimists counter that the efficiency of both Vauxhall's car factory at Ellesmere Port and the van plant at Luton will secure their future in the new GME.
Lord Mandelson, the Business Secretary, is yet to meet the company to discuss the proposal, but earlier talks included commitments to maintain Vauxhall production, he said last week.
The GME deal is thought to leave Magna with a 20 per cent stake, Sberbank with 35 per cent, GM with 35 per cent and Opel staff with 10 per cent. A partnership with the Russian van maker Gaz – which has just bailed out of the failing UK van maker LDV – aims for a 20 per cent share of Russia's car market.