GM pledges almost £2bn to European brands

General Motors has pledged to spend €1.9bn (£1.7bn) to restructure its European marques Opel and Vauxhall.

Vauxhall Astra

The carmaker says that it estimates that the marques need €3.3bn (£3bn) to be turned around, three times more than it originally pledged.

The car manufacturer is now asking that European governments put up loans and guarantees worth €2bn (£1.8bn) euros, down from €2.7bn ( £2.4bn). It hopes to have Opel/Vauxhall back to profitability by 2012.

GM Europe president, Nick Reilly, says: “We have shared this decision with the European Commission as well as the national and state governments involved,”

“We hope that our strong commitment will be well received as a major milestone in our ongoing discussions about government guarantees to cover the remaining gap.”

GM is 62%-owned by the US government since emerging from bankruptcy last year. It is cutting 8,300 jobs across Europe and is closing plants as it seeks to revive the brand.

No jobs will be lost at the Ellesmere Port factory in Cheshire, which employs 2,166 people and makes the Vauxhall Astra. But over 510 jobs are to go at Vauxhall’s Bedfordshire van plant and 369 jobs would be lost at its Luton plant.

It also plans to invest €11bn (£10bn) “in a new product offensive” over the next five years. Opel/Vauxhall plans to launch eight new models this year, and another four in 2011.

GM chairman Ed Whitacre, adds: “Beyond the purely financial aspects, we see this as a major step towards instilling renewed trust and confidence into Opel/Vauxhall’s customers, employees, business partners, unions, dealers and European governments.”

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