Workers Revolutionary Party - MAGNA TO SEND BUSINESS PLANS TO MANDELSON

The News Line: News Monday, 6 July 2009 MAGNA TO SEND BUSINESS PLANS TO MANDELSON

GM Luton convenor GARY REA waves goodbye to Business Secretary Mandelson after their meeting in which Mandelson refused to guarantee jobs at the Luton plant – workers now expect a mass meeting

Business Secretary Mandelson has signalled that the government may provide a bridging loan or loan guarantees to help finance the sale of GM Europe, which includes Germany’s Opel and the UK’s Vauxhall brands.

GM is seeking about 500m euros (£428m) from the UK in addition to funds from other EU countries that host its plants. Germany has already loaned 1.5bn euros to Opel and plans to offer more in loans and guarantees.

Speaking at GM’s Vauxhall van plant in Luton on Friday, Mandelson said that he had met or spoken to Siegfried Wolf, Canadian auto parts giant Magna’s co-chief executive, three times about its bid for GM Europe, but Magna could offer no gaurantee to preserve jobs.

No deal has been signed, but he added that ‘Wolf has made reassuring noises in that they are working on a business plan’ which Mandelson expects to see within the next two weeks.

Unite joint general secretary Tony Woodley said Mandelson had ‘made it clear government is playing a full and active role’.

Mandelson downplayed concerns that GM may yet choose to sell a stake in GM Europe to another bidder, in the wake of a new bid by Beijing Automotive Industry Corporation (BAIC).

BAIC bid 660m euros ($923m). GM described BAIC’s approach as ‘comparable with the others’ but with the ‘very significant’ difference that it would let GM keep a larger stake.

RHJ International, linked to US buy-out group Ripplewood, has also made a non-binding offer. Fiat is also interested in Opel, but pledged no cash.

Meanwhile, the Serious Fraud Office (SFO) is to investigate the circumstances surrounding the demise of Birmingham-based carmaker MG Rover in 2005.

It follows a four-year inquiry into the collapse, which led to 6,000 job cuts.

The four executives in control of MG Rover at the time said there was ‘no suggestion of improper conduct’.