Government loan saves 3,200 Vauxhall UK jobs

More than 3,200 jobs at Vauxhall were secured today after Lord Mandelson, the Business Secretary, made a £270 million loan guarantee to General Motors to ensure that the American carmaker keeps its operations in Britain.

Last month General Motors said that it would be cutting more than 500 British jobs but would commit to keeping operations going at Ellesmere Port and in Luton if there was state support.

Lord Mandelson today honoured his end of the deal as part of complex commitments from GM and from other European governments promising a total of £2.4 billion to Opel, Vauxhall's sister company, on the Continent.

“I always said the Government would stand foursquare behind Vauxhall and with this announcement today we have kept our word," 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.”

Last month Nick Reilly, the Welshman who runs GM Europe, said that he was cutting 500 workers in the UK, most of them at Luton. But those cuts, he said, with state support would save more than 2,100 jobs at Ellesmere Port, the home of the Vauxhall Astra, and 1,100 jobs at Luton which makes Vauxhall, Renault and Nissan vans.

Throughout Europe one in six GM workers are being let go.

Tony Woodley, the joint leader of the Unite union representing Vauxhall workers, said: “This announcement is great news for British industry. The loan will help save thousands of jobs in Vauxhall’s operations and in the 400 companies in its supply chain."

Robert Lea, Times Online 12-03-2010