General Motors in the US appears to be on the brink of filing for bankruptcy, while Chrysler is hoping a US court will clear the way for the car company to be sold to a Fiat-led consortium.
The fate of GM’s European operations has also led to concerns of thousands of jobs losses in its two UK Vauxhall plants. Unions are now calling on the UK government to step in and help protect jobs at the Luton and Ellesmere Port plants which employ around 5,500 workers.
Business Secretary Lord Mandelson says it is now considering providing financial assistance to the eventual buyer.
Talks with the German government over the future of GM’s Opel and Vauxhall businesses broke down yesterday ((May 27) and there is still no decision on which interested party will acquire its ailing European unit.
Fiat and Canadian auto parts company, Magna International have emerged as the two bidders for Opel and Vauxhall, with talks continuing this week.
GM in the US is now moving closer to filing for the largest bankruptcy ever made by a US industrial company, after failing to secure a bond exchange proposal.
Meanwhile, less than a month after filing for Chapter 11 bankruptcy, US car maker, Chrysler, is facing court to try to approve its sale to a Fiat-led consortium which includes the US and Canadian governments and labour unions, in exchange for the payment of $2bn (£1.2bn) to its lenders.
The deal is widely expected to be approved by the US court which would allow it to exit from bankruptcy protection.