Peter Mandelson’s eye on bids to take over Vauxhall plants

By Phil Robinson

BUSINESS Secretary Lord Mandelson is keeping a close eye on developments as the battle for ownership of General Motors’ European operations enters its final round.

As bidding to take over Vauxhall Motors and its German sister-company ended on Monday night, three potential new owners had lined up.

They are Canadian-owned parts manufacturer Magna, Belgian-based venture capital group RHJ and China’s Beijing Automotive Industries.

General Motors said it would now carefully consider all the bids before giving judgement on which appears to offers the best deal.

Details will then be scrutinised by the German and UK governments, the EU Commission and the Opel/Vauxhall Trust Board.

A GM spokesman said an announcement would be made on the new owners by the end of the month.

Lord Mandelson is taking a personal interest in how the situation unfolds and has pledged to do all he can to ensure the long-term future of the Vauxhall plants at Luton and Ellesmere Port, where 5,000 jobs hang in the balance, including hundreds from Wrexham and Flintshire.

Although Magna was declared as preferred bidder for GM Europe some weeks ago, the company had to re-submit its bid – along with the other two suitors – by Monday night.

Magna’s bid is supported by Russia’s Sberbank and there has been concern that if it acquired GM Europe, too many details of its highly advanced car technology would be used to boost the Russian motor industry.

It is understood that Magna’s new bid contains assurances that this will not happen.

Insiders say that despite the RHJ bid offering a number of attractive features, Magna remains favourite in the race.German Chancellor Angela Merkel and Russian President Dmitry Medvedev have both voiced their support for Magna.

Magna has pledged that “no immediate plant closures are contemplated” at either Vauxhall site until at least 2013.RHJ is also expected to support saving both Vauxhall factories – but may ask workers to take pay cuts.

GM was forced to put its Europeam arm up for sale as part of its massive restructuring that saw it go into Chapter 11 bankruptcy in the US – before emerging as a leaner company with less debt.

Opel has been placed under the ownership of a trustee in which both GM and the German government have a stake.

Whichever bid is eventually successful, Lord Mandelson is expected to offer a sizeable amount of Government cash assistance to secure Vauxhall jobs.