Takeover could mean cutbacks for Vauxhall
Thousands of UK workers are at risk of losing their jobs in the wake of the collapse of American car manufacturing giant General Motors (GM). The company filed for bankruptcy in the US yesterday, leaving the future of all its workers uncertain. GM Europe, which consists of UK brand Vauxhall and the German Opel, has already been sold off to Magna International, a Canadian car parts company. But although this means that both the British and German brands will continue production, a fall in demand for car sales and car leasing deals could mean that Magna will be making significant job cuts.
The worry for Vauxhall is that Magna is a relatively unknown company in the UK, with ties to Russian oligarch Oleg Deripaska’s vans company and Sberbank, a Russian bank. The Russian involvement has raised worries about production at Vauxhall’s Luton plant, a joint venture with Renault where Trafic and Vivara vans are made, could be moved to Russia, leaving the Luton’s 1,400 workers without jobs. The German government also had a part to play in ensuring that the takeover was a success, causing worries that the Opel factories and workers may be protected as a priority and that any cutbacks would have to be made in the UK. Of course nothing has been officially confirmed to date as Magna have made no promises yet and have said they will do all they can to protect as many jobs as possible.
For Vauxhall’s 5,500 UK workers, all they can do is to remain hopeful that the company will recover quickly after the takeover by Magna, who obtained the company over other potential buyers including Italian car manufacturer Fiat. Car leasing and car sales will need to improve soon for the decision to keep factories open to be viable. In the meantime for buyers interested in purchasing a car from Vauxhall, car leasing could be a better option as it enables you to choose from a wider range of vehicles, and is less likely to leave you in a difficult position if the company suffers any further disaster in the future.
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