GM to axe 10 000 jobs across Europe

General Motors expects to axe around 10,000 jobs across Europe as part of its restructuring of Vauxhall and Opel. The company said last night that jobs will have to go after the announcement that the car giant had decided to scrap plans to sell the brands to Canadian car parts firm Magna International.

British union leaders responded to the latest development by saying redundancies were inevitable but pledged to work towards minimising the impact on Vauxhall's UK workforce.

In a Q&A session with journalists, John Smith, GM's group vice president, said: "Our plans envisaged a headcount reduction of roughly 10,000 people." But he did not give details as to how this would relate to individual countries or plants.

Tony Woodley, joint general secretary of Unite, said in response: "I have no doubt that whoever the owner would be, there will be major restructuring of GM operations. Inevitably some will go in the UK, but our task is to minimise the number of jobs lost and ensure that those who do go, go voluntarily.

He added: "It is right that GM should hold onto its UK plants because this country is one of its strongest and most loyal customers."

Tuesday's announcement that Vauxhall and Opel are to be retained by GM was greeted by cautious optimism among some of the 5,500 workers employed by Vauxhall in the UK, mainly at Ellesmere Port and Luton - but it sparked anger in Germany.

Analysts predict that two German plants could now close, with the loss of thousands of jobs, as a result of GM's decision.

Workers across Europe were concerned that Magna's takeover would give an unfair advantage to Opel's vast workforce in Germany, as their government was willing to give loans worth £4 billion. German workers will begin walk-outs today in protest at GM's decision, while the German government denounced the car giant's behaviour as "totally unacceptable".

UK business secretary Lord Mandelson said the decision was a "major U-turn", adding: "I am keen for very early discussions with GM over their plans for the business and how they will affect British plants and workers.

"I have always said that if the right long-term sustainable solution is identified, then the government would be willing to support this."

Mr Woodley, who used to work at Vauxhall's Ellesmere Port plant, called on the government to help ease the restructuring process by extending credit to GM. He said: "What is absolutely certain is that GM will need repayable loans - not state handouts - from four or five EU nations.

"If our government can hand over billions to help the banks this week then it is surely right they make assistance available now to our car industry which is a real investment in manufacturing jobs and our children's futures."

Speaking ahead of the job loss announcement, John Featherstone, Unite's convener at Ellesmere Port, acknowledged that there would be some restructuring in the UK but added that unions were generally happy to be dealing with GM.

"Detail is in short supply and we don't know what the immediate effect will be, but I am pleased we will be dealing with GM because we know them and we understand their culture - and they know us. I hope Lord Mandelson will now demand that GM gives us guarantees about future production. The mood here is one of cautious optimism."

Around 2,200 workers are employed at Ellesmere Port, producing the new Astra on two shifts, but Mr Featherstone said he hoped the plant could step up to three shifts.

Guarantees about the future of the van plant at Luton will also be sought. Unions struck a deal weeks ago with Magna which would have led to hundreds of voluntary redundancies.

Despite announcing the sale to Magna, the deal was never signed, although it was due to be finalised in the coming days.

Downing Street today said that Lord Mandelson had "good phone calls" with Fritz Henderson, the CEO of GM USA, and German economics minister Rainer Bruederle yesterday.

"He reiterated the Government's support for the UK operations," said Prime Minister Gordon Brown's spokesman. "We would like to have early sight of the GM business plan, given that they have had a change of view. That is the next step."

The spokesman made no comment on the likelihood of any job losses in GM's British operations.

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