VAUXHALL could benefit from fresh investment if its owner General Motors (GM) presses ahead with a plan to sell a controlling stake in its European arm.
An investor would be required to spend more than £440m, but this money would go into a new company, rather than to GM, according to reports.
Currently, GM Europe employs 50,000 staff across Europe, with 2,000 employed at Vauxhall’s Ellesmere Port plant.
The Cheshire site has a secure future within Vauxhall, because it is the lead production plant for the next generation Astra, scheduled for launch in quarter three of 2009.
However this depends on the ongoing viability of GM, which has been severely affected by the economic downturn and slump in new car sales.
There have been a number of warnings in recent weeks about the future of GM, with the American firm under significant pressure despite bail-outs totalling £9.5bn from the US Treasury so far.
This financial support, however, has been provided only with guarantees of stringent cost-cutting. In February, GM presented a restructuring plan to the US Government that will result in up to 47,000 job cuts worldwide, with its European division required to make savings of £850m.
There remain significant concerns that GM will still have to file for bankruptcy in America.
GM Europe has been developing its own restructuring plan that would see it become a stand-alone company – but it says it needs more than £3bn in support from European governments.
Yesterday’s reports bring that a step closer, especially as the German Government has said it would provide loan guarantees for a third-party investor.
GM wants potential investors to confirm their interest in the next three weeks.
The company would be set up to manage GM’s European operations, principally Opel and Vauxhall.
GM is continuing to explore ways to sell its Swedish brand, Saab.
The bulk of state support for GM in Europe would come from Germany, where most of the European business is based.
GM is in dire straits as it tries to stay afloat while being buffeted by the global economic storm.
Car sales plummeted in 2008, with GM reporting a 10.5% fall for its core European brands, Vauxhall and Opel.
