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Will the European Commission block the takeover of GM Europe?

While the deal between GM Europe and Magna appeared to have been done and dusted, today we see more revelations regarding the European Commission and a potential review of the takeover. It seems as though the EC is adamant that while it is necessary for GM Europe to be bailed out it will need to be done within European competition rules and government subsidy regulations.

As we have mentioned on a number of occasions, there appears to be some concern that the German authorities have taken the lead and offered the highest subsidy in exchange for more job security for the German workforce. Despite the fact that Gordon Brown and Lord Mandelson had been adamant that Vauxhall will remain a major part of the UK car industry, there are concerns regarding potential job cuts in the short to medium term. There are also a number of trade agreements up for renegotiation over the next five years or so which could give Magna the opportunity to cut ties with areas such as the UK in due course.

The UK government finally appears ready to use taxpayer subsidies to attract the likes of GM Europe and its new owner Magna but will this be too little too late?

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