THE uncertainty about the futures of our local car factories could be drawing to a close.
Belgium’s RHJ looks intent on submitting its bid to buy GM Europe within a few days. If accepted, RHJ would take over Opel and Vauxhall factories in Europe, including one at Ellesmere Port.
It should, of course, be remembered that RHJ isn’t the only bidder. Canada’s Magna and China’s Beijing Automotive Industry Corp are both still very much in the hunt. Nevertheless, Europe’s governments will exercise influence over the eventual sale of GM Europe, both through any cash they chip in to the deal and diplomatic pressure on Washington, where the final decision will be made. RHJ’s promise to keep plants going could make a decisive difference.
Ellesmere Port has had a bit of a roller- coaster ride through recent months, but with plans to launch a new model there now just weeks away from becoming a reality, it looks likely that it will play a big part in the immediate future of the car group, whoever buys it.
RHJ sounds particularly optimistic, claiming GM Europe can return to profit within two years. In its own right, that would be a minor miracle and would represent a big turnaround in fortunes.
It would also represent a big culture shock for the workforce. Imagine, after years of belonging to a struggling firm running up enormous losses, working for a profitable business that has a prospect of being around in decades to come. What a relief that would be.
Of course, a deal will have to be struck soon, if the launch of the next generation Astra is not to be postponed, as it’s hardly likely that the US government would want to underwrite a new launch. Postponement, though, is the worst that can happen, as the car firm will need new models in place for the upturn. Car sales may start to see some improvement next year. They could hardly get any worse, could they?
The RHJ bid is a bit out of the blue. The Belgians came to the table late, but what a pleasant twist to the tale it could turn out to be.
MEANWHILE, Lord Peter Mandelson has been making some interesting noises about Jaguar Land Rover.
As the Daily Post reports today, business secretary Lord Mandelson is not convinced that JLR or Tata Motors are in any imminent danger. He tells us the firm doesn’t need a government cash bail-out. Things aren’t that bad there, he seems to think.
JLR, on the other hand, has been implying money is tight and demanding some interim support. But the company has been making such demands since Christmas, and, with every month that passes with no sign of the administrators arriving at the door, the more the anxiety looks misplaced.
For the time being, talk of closing Halewood has to be sabre-rattling, albeit uncomfortable sabre-rattling for Halewood staff.
Previously, I have suspected that Lord Mandelson was ideologically opposed to state intervention in the car industry, seeing any grants as throwing good money after bad. But, as time has passed, and the government has said more on the subject, it is beginning to look as if it would step in if the need arose.
What is puzzling, though, is why it did not say so before now? I guess the Treasury didn’t want to encourage the belief that there was a pot of cash available.
