Vauxhall's future still uncertain

General Motors is being forced to make sweeping changes by the US Government after it was bailed it out with billions of dollars of American taxpayers' money. A pivotal part of the maker's plans is the sale of its European arm.

That means Vauxhall is for sale along with Opel in Europe, and over the past few days a number of serious bidders have emerged, with the German Government playing a central role in discussions because it has promised substantial financial support to whoever takes over the troubled group of car brands.

And that's significant because, with a German general election close, its Government will want to avoid job losses on its home soil - prompting fears that Vauxhall's Luton and Ellesmere Port factories will take a hit instead. 5,500 people are employed between the two UK plants.

But last night German officials blasted GM for revealing very late in discussions that Opel would need an extra £260m in immediate funds to survive short-term. That prompted one of the bidders, Ripplewood Holdings, to pull out, leaving just Fiat and Canadian bidder Magna. German Economy Minister Karl-Theodor zu Guttenberg described the late revelation as “pretty scandalous”.

Both the UK and Belgium are watching developments closely (Opel has a plant in Antwerp too), with unions from both countries criticising their respective Governments for not being involved enough in the process, allowing the German Government to effectively safeguard the 25,000 jobs based there while others hang in the balance.

A decision is expected shortly, with the US Government giving GM a June 1st deadline to either declare bankruptcy or restructure.

Mark Nichol