By Caroline Colebrook
UNION leaders are pressuring the Government to do more to secure the future of Vauxhall factories in Britain, after a weekend of international negotiation that saw the Canadian car parts manufacturer, Magna, and the Russian bank, Sberbank agree to take over the European section of the failing US giant General Motors – Vauxhall’s parent company.
The United States government has been forced to step in to rescue General Motors as it filed for bankruptcy protection from its creditors after running up £100 billion in losses.
GM will still exist with the help of the US taxpayers but on a smaller scale producing more environmentally friendly vehicles.
That leaves Magna and Sberbank in charge of all the GM operations in Europe and this includes Vauxhall and the Opel factories in Germany. The German government has been lobbying hard and putting up a $2 billion bridging loan to help the deal and hosted the negotiations.
Under the deal Magna will have a 20 per cent stake in the European section on GM, Sberbank will hold 35 per cent, GM will hold on to 35 per cent and Opel employees will own 10 per cent.
Sberbank is backed by the Russian aluminium tycoon Oleg Deripaska, who also owns the commercial vehicle manufacturer, Gaz, which is based in Russia. Unions fear he may seek to transfer van production from Luton to Russia.
Magna has not ruled out making some cuts as the market for cars shrinks in the recession and this is leaving the workers at the two Vauxhall plants in Britain – Luton in Bedfordshire and Ellesmere Port in Cheshire – very vulnerable.
Prime Minister Gordon Brown and Business Secretary Lord Mandelson have been making optimistic remarks. But on Monday, pressed by the unions, Mandelson had to admit he could give them no definite information about the future of Vauxhall in Britain because he simply did not know.
Mandelson met the chief of Sberbank last Friday and will meet Germany’s economic minister next week.
Of the two factories in Britain, Ellesmere Port seems safest because it is due to start making the new Astra in September.
Tony Woodley, joint general secretary of the giant union Unite, said: “We need Mr Mandelson to bat strongly to make sure that Luton and Ellesmere Port have a long-term future.”
His co-general secretary, Derek Simpson, said: “The Germans have been central to this. We appear to have been on the sidelines.
“With the German plants literally guaranteed security, thanks presumably to the German government’s involvement and the billions of euros that they seem to be putting up, that causes a worry for everyone else.”
At Ellesmere Port a 50-year-old man, who asked not to be named, said: “It seems that the German government are looking after the German people and I don’t feel enough is being done to safeguard our jobs in the UK.”
Mandelson met the chief executive of Sberbank last Friday and will meet Germany’s economic minister next week.
Mandelson said he would seek swift confirmation from the Canadian firm that none of the Vauxhall jobs in Britain would be lost.
But union leaders criticised Mandelson for not being more involved in the negotiations, which took place in Germany and were led by Chancellor Angela Merkel.
“I hope that Lord Mandelson is doing for our plants what the German government is clearly doing for the Opel plants,” Simpson said.
Another cause for concern for the Vauxhall workers is that European labour laws make it much more difficult and expensive for employers to sack German workers than those in Britain.
Unemployment in Britain has surged above two million for the first time in a decade and is forecast to hit three million by the end of the year.
Derek Simpson said he feared the new owners might think it would be “easier, cheaper and quicker” to cut British jobs rather than at other European plants.
"That is the great worry – that the German plants will be saved and that just puts more pressure on everywhere else, obviously including the UK."
Labour Luton North MP Kelvin Hopkins said: “It’s unthinkable what would happen if we do not keep this plant open. Our government has got to defend our plants and jobs as strongly as the Germans are theirs.”
The Italian government seems to be doing even worse than Mandelson and is under fire for failing to back car maker Fiat and persuade Germany it would be the best partner for Opel.
“The Italian government was ... the least in evidence,” Guglielmo Epifani, head of the CGIL union, told La Repubblica newspaper in an interview published on Sunday.
“That’s a really bad thing,” he added. “It was politics which decided in (US car capital) Detroit ... and it was politics that decided in Berlin,” he added.
Meanwhile, Honda car workers returned to the production line in Swindon, Wilts, on Monday after a four-month shutdown.
But the 3,400 staff went back to lower wages and will be producing fewer cars.