By Anthony Clark, Plastics and Rubber Weekly
General Motor's sale of its European business to Canadian car parts manufacturer, Magna, could collapse. According to media reports, Magna wants to see immediate progress on the deal, which started to unravel last week when the UK and Spain both questioned the terms negotiated by the German government.
The principal bone of contention is the level of job cuts at Opel and Vauxhall plants that each country could see. There are concerns that Germany's Euro 4500-million financial support package for the deal could have influenced where the jobs axe will fall. Some 10 500 jobs could be lost overall, with Germany least effected.
UK business secretary, Lord Mandelson, has said the deal as currently envisaged has "shortcomings". Around 1200 jobs could be lost in the UK under the restructuring plan, 25 percent of its GM workforce, compared with just 16 percent of Germany's 25 000 head count.
The alarm bells first rang when Magna revealed its restructuring of the GM business in Europe would see large cuts in the workforce at the Ellesmere Port plant, one of GM's most efficient European plants.
As sign of just how bad things could get, GM is still viewing alternative deals including a sale to investor RHJ International.