Business Secretary Lord Mandelson has announced today a €300 million (£270m) loan guarantee to General Motors (GM) Europe.
The money will help to secure GM brand Vauxhall’s continued operations in Britain at its two plants; Luton and Ellesmere Port. It will also support Vauxhall’s sister brand Opel within its operations on mainland Europe.
Today’s outline agreement follows on from complex talks between the Government and GM. The guarantee will be provided under the Government’s Automotive Assistance Programme. It is believed to be the first loan secured through the programme, set up to support the UK car industry.
The British loan guarantee will be provided alongside extra support from GM in the US and support from other European governments.
Lord Mandelson said: “I always said the Government would stand foursquare behind Vauxhall and with this announcement today we have kept our word. These are excellent plants employing a first rate workforce.
"We need Vauxhall to thrive as part of Britain’s automotive manufacturing base and following our negotiations with GM Europe I am confident it will do so”.
Discussions will continue with GM and other European governments to finalise the remaining details of funding terms and arrangements enabling the implementation of the business plan.
The car giant had originally planned to sell Vauxhall and Opel as part of its restructuring process, however it reversed that decision last year. The new loan should help to bring Vauxhall’s planned production for the range-extended Ampera-to fruition. The Ampera is currently due to start production before the end of the 2012.
