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Stephen Ottley11 Jun 2009
NEWS

GM's European withdrawal continues

Anxious times for Opel, Vauxhall and Saab with future plans uncertain

While most of the attention is focused on the new government-owned General Motors American operations across the Atlantic there is even more uncertainty. Opel/Vauxhall suitors Magna International have begun planning but there is still no buyer for Swedish brand Saab.


The Canadian bosses from Magna spent the last week touring facilities around Europe in a bid to better understand the troubled company's position. GM has admitted that the European operation is well over capacity. Currently there are 10 factories between Opel and Vauxhall and it is understood as many as three could be lost; costing as many as 11,000 jobs.


Among the most concerned group is Vauxhall with its two factories in Luton and Ellesmere Port, both visited by Magna's due diligence team this week. Magna has already agreed with the German government not to close any of the German Opel plants as part of the buy-out terms.


The Luton plant is the most at risk because Ellesmere Port won the rights to manufacture the new Astra two years ago under GM control. But there are fears that when the Astra production run ends in 2016 it could spell the end of mass car manufacturing in the UK.


British Business Secretary Peter Mandelson is meeting with German government officials and representatives from Magna in the coming days to try and safeguard the UK jobs.


Meanwhile it has been confirmed that there are three parties interested in taking over beleaguered Saab. Swedish supercar constructor Koenigsegg; private holding firm Renco and Merbanco, a group of US investors, are due to engage in talks with GM over a potential buyout.


GM has committed assets and cash worth US$500 million to the new owner and the Swedish government has said it is prepared to commit a further US$500 million in loan guarantees. But the government said this week that it will only do so if the new owner puts forward a viable long-term business plan.


"Saab needs (a new owner) that has a lot of capital and can be a long-term owner, and who has a business plan for what they will do with Saab in the future," Swedish Industry Minister, Maud Olofsson is quoted as saying in an interview.


GM is hopeful of announcing a buyer as soon as the end of the week.



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Written byStephen Ottley
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