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UK government in fight for Vauxhall survival

As we covered yesterday, General Motors is literally fighting for its life with the US government insisting upon a breakup of the international vehicle manufacturer. The situation has become very complicated over last few weeks amid signs that the German government, where 50% of GM Europe is based, has taken control of talks. While Lord Mandelson has claimed he is working with the German authorities to secure UK jobs at the various GM factories in the country, there are concerns that the UK government has been unwilling to put "cash on the table".

A significant bust up with the unions appears on the cards with union leaders adamant the government is not doing enough. Lord Mandelson suggested the situation could drag on for some time although each day lost is potentially another nail in the coffin of the UK car manufacturing industry. The authorities have promised significant investment, which has yet to appear, introduced the car scrappage scheme, which has been of limited success, and thousands upon thousands of jobs are now at risk.

Whether Gordon Brown can afford to upset the unions as we approach the next general election, with funding problems already confirmed by the Labour Party, remains to be seen.

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