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GM delays decision on Opel

A decision on the future of Vauxhall has been delayed by the board of General Motors (GM).

The Detroit-based firm met on Friday to decide who should buy its Opel division, but no conclusion was reached.

Future ownership of Opel is between the Canadian component manufacturer Magna and Belgian financial group RHJ.

The BBC reported that it understands a number of stumbling blocks have emerged to delay the final decision.

The German government - which has openly preferred the bid from Magna and has offered it bridging finance of 4.5bn euros (£3.9bn) - is thought to have added further conditions to that support.

Magna has publicly promised to cut fewer jobs in Germany, where 25,000 people are currently employed in the division.

Mandelson to support UK carmakers

Lord Mandelson has also said he would stand by the UK carmaking industry - in particular Vauxhall, which employs more than 5,000 people directly in its plants in Ellesmere Port, Cheshire, and Luton, Bedfordshire.

He did not specify what level of financial support, if any, would be provided and he has also warned there would be some job losses irrespective of who gains control of Vauxhall.

Buy-back option

There is also speculation that GM may prefer to exercise a buy-back option in the future.

This would allow it to re-acquire Opel and Vauxhall within a few years at an advantageous price - an option which may be unpalatable to any potential buyers.

German media has also reported that GM might place Opel into insolvency, but this was played down by a GM spokesman.

Source: BBC News
 

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