GM Generali

Generali (AQEU:GM)
Historical Stock Chart

From Jul 2019 to Jul 2024

U.K. Business Secretary Peter Mandelson said Friday it is "pretty likely" Canadian car components maker Magna International Inc. (MGA) and General Motors (GM) will become shared owners of U.K.-based carmaker Vauxhall.

Speaking to Sky News and BBC television, Mandelson said he would seek a "very early" further meeting with the parties once the initial talks had been concluded to secure a "cast iron guarantee" on U.K. production and employment.

"I have no doubt that the British government ... will be asked to underwrite the deal financially and I have already said that the British government in principle would be prepared to consider that, but that would be linked to production and employment in the U.K.," he said.

GM's U.K. unit has two plants manufacturing Vauxhall, Opel (OPL.V), Renault (RNO.FR), and Nissan (NSANY) models and employs a total of about 5,500 people.

Mandelson said it seemed bridging finance from the German government, which wouldn't only support Opel, but help ward off GM insolvency in Europe more broadly, was set to be put in place, but that had yet to be confirmed.

"I judge positively that with new owners, shared ownership between General Motors in the USA, Magna International ... plus their partner in Russia, it looks as if General Motors in Europe can be saved, it can be turned round, but of course it will involve change. There is excess capacity," Mandelson said.

He added Magna's willingness to contribute bridging finance supported its case. Italian automaker Fiat SpA (F.MI) said earlier it remained interested in Opel but there was nothing more to discuss until GM, the German government and U.S. Treasury had settled their differences.

-By Natasha Brereton, Dow Jones Newswires; +44 20 7842 9254; natasha.brereton@dowjones.com