Magna gets Vauxhall and Opel

Well it looks as if Fiat has lost out in its bid to take over GM’s European operations, with the announcement that Canadian parts maker Magna has agreed a deal to take control of the ailing car giant’s Opel and Vauxhall brands.

The German Government is to supply funding of €1.5 billion to help the new Opel/Vauxhall operation to finance the transition. The news hasn’t come a moment too soon, as the US Government had given GM only until Monday to resolve the issue before the likely bankruptcy of GM. The Opel/Vauxhall operation will now be ring-fenced from the insolvency of its former parent in the US and will become ana entity in its own right.

But what of jobs in Germany and the UK? It seems that Magna has agreed there will be no more than 2,500 redundancies in Germany – about 10% of the work force – but there is talk of the need to shed some 11,000 jobs in total. It seems likely that many of those will go in the UK instead of the plants Opel has in Eastern Europe, which is not going to be good news for Vauxhall’s workforce.

It remains to be seen how this all plays out, and we will now have to wait a further five weeks before the final plans are released in any detail. But whatever happens, it is certain that the new Magna-owned company will still be tied in to the old GM for platforms and technology for a long time to come.

It does seem that a deal with Fiat would have been better for the car industry, and for UK workers. But the Germans were calling the shots with their big loan guarantees, and seem to have opted for the solution that protected the highest number of German jobs.

And where was Lord ‘Mandy’ in all this?