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UK government under pressure over potential Vauxhall job losses

Despite Gordon Brown and Lord Mandelson issuing a joint statement yesterday which indicated that they would fight tooth and nail to protect Vauxhall Motor jobs in the UK, a leaked document by Canadian outfit Magna International, which is a potential bidder for the operation, would seem to suggest that cost-cutting in the UK could be severe.

While there has been no confirmation of the figures detailed on the leaked document, or indeed confirmation it is genuine, it would appear that the company has plans to shelve 1200 jobs in the UK which would be a bitter blow for the British motor industry. However, on a more positive note, the company believes it can turn around the Vauxhall operation to become profitable by 2011 and would channel 10% of any profits in the future towards a staff bonus scheme.

The problem regarding GM Europe, and specifically the Vauxhall operation in the UK, is the fact that the longer the issue goes on the more chance of business drying up and debts increasing. This would place more and more pressure on the new owner, whoever this may be, assuming that the operation is not pushed into bankruptcy as we have seen in other industries. The next few weeks are vital for the success and survival of Vauxhall in the UK although it looks as though the UK government has very little influence over its German counterpart.

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