GM-owned Vauxhall has confirmed that it is searching for private investors following its parent company’s decision to launch it as part of an independent business.
GM Europe is to outline a proposal to European governments today which will see up to half of Opel/Vauxhall being acquired from outside investors. GM has confirmed that it will retain a remaining stake in Vauxhall/Opel.
Carl-Peter Forster, head of GM Europe, said the new entity is seeking €3.3bn (£2.9bn) in aid from European governments and will also get €3bn from GM.
The new Vauxhall/Opel business unit is also looking to make €1.2bn in cost cuts as it lowers capacity.
Vauxhall’s UK plants in Ellesmere Port and Luton are likely to come out of the restructuring unscathed, according to a source close to the company.
Government frees up £2.3bn
GM’s announcement follows the European Commission’s approval of the UK government’s plans to offer £2.3bn worth of lending for its automotive industry.
The Society of Motor Manufacturers and Traders (SMMT) welcomed the government’s announcement but urged for immediate action on outstanding proposals aimed at stimulating market demand.
Paul Everitt, SMMT chief executive, said: “The clearance of state aid to support the automotive sector is an important step in sustaining the UK motor industry, but the need for short-term measures to kick-start demand in the market remains critical.”
Everitt said there was real need to ease consumer credit and attract customers back into showrooms.
He said: “Across the EU, member states have introduced scrappage incentive schemes which have already proved successful in their ability to stimulate demand and minimise the impact on manufacturing and retail jobs. It is vital the UK government reflects the action and pace of support given across Europe to ensure the UK remains globally competitive.”
Following approval by the European Commission, automotive companies throughout the supply chain can now begin accessing the £1bn of UK loans and loan guarantees and the £1.3 billion of European Investment Bank (EIB) funding announced on January 27. However, eligibility criteria and access routes are still to be clarified.