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Lord Mandelson refuses to support Vauxhall deal

Despite only a few weeks ago suggesting that the UK government would be behind the Magna deal to acquire GM Europe, Lord Mandelson has today suggested that the acquisition will not receive the support of the UK government in its current form. When you consider that literally thousands of jobs are at risk in the UK, primarily at the Vauxhall subsidiary, it seems very strange that the government is looking to pick a fight with the potential new owners of the operation.

The fact that the UK government also has around £2.5 billion to assist the UK car industry is also rather bizarre because the authorities seem adamant this will not be spent in the short to medium term. The UK car industry has been under pressure for many years and starved of government investment in the short to medium term. If the Vauxhall operation was to go under, or manufacturing moved overseas, this would literally wipe out the UK car industry and leave very few jobs in an ever decreasing sector.

Quite why the government appears to have changed tack on this particular deal is unclear but this is a very risky strategy and one which could backfire spectacularly.

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