Vauxhall Motors future in the balance
It has today been revealed that GM Europe (General Motors Europe) has today agreed draft takeover proposals with two potential bidders. The bidders are the Canadian company Magna International and RHJ International which is an investment fund bidding to acquire GM's European division. So what will happen to Vauxhall?
The situation regarding Vauxhall, which employs 5000 people in the UK and is one of the largest subsidiaries of the GM Europe operation, is very much in the balance. General Motors itself is currently under bankruptcy protection in the US although it is expected to return to the fold as and when the overseas divisions have been sold off and total focus is on the US division. This is a very difficult time for the UK government as significant finance has been promised to support Vauxhall but has yet to be forthcoming.
Conscious of various accusations aired during the MG Rover debacle, with suggestion that taxpayers money was used to shore up a business in terminal decline in an area of political sensitivity, the UK government needs to be careful. It will be interesting to see how the situation develops because ultimately the longer it is left to drag on the weaker GM Europe will become which will directly impact upon the profitability and cash flow of the Vauxhall operation.
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