Thousands of UK workers are at risk of losing their jobs over the recent collapse of American car manufacturing giant General Motors (GM). The company filed for bankruptcy in the US yesterday, leaving the future of all its workers uncertain. The European branch of GM, which includes Vauxhall in the UK as well as the German brand Opel, has been bought out by Canadian car parts company Magna International. But although this means that both the British and German brands will continue production, a fall in demand for car sales and car leasing deals could mean that Magna will be making significant job cuts.
The worry for Vauxhall is that Magna is a relatively unknown company in the UK, with ties to the Russian vans company run by oligarch Oleg Deripaska and Sberbank, a Russian bank. The Russian involvement has raised worries about production at Vauxhall’s Luton plant, a joint venture with Renault where Trafic and Vivara vans are made, could be switched to Russia, putting the 1,400 workers at Luton at risk of losing their jobs. The German government also had a hand in making sure the takeover deal went smoothly, leading to fears that all the company’s German plants could be protected and that if cutbacks in production and staff were necessary, it would have to happen in the UK. However this is all speculation at this point as Magna have made no promises yet and have said they will do all they can to protect as many jobs as possible.
For Vauxhall’s 5,500 UK workers, all they can do is to remain hopeful that the company will recover quickly after the takeover by Magna, who obtained the company over other potential buyers including Italian car manufacturer Fiat. Car leasing and car sales will need to improve soon for the decision to keep factories open to be viable. In the meantime for buyers interested in purchasing a car from Vauxhall, car leasing could be a better option as it enables you to choose from a wider range of vehicles, and is less likely to leave you in a difficult position if the company suffers any further disaster in the future.
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