Lord Mandelson seeks GM Europe job pledge as Magna wins race for Vauxhall

Lord Mandelson seeks GM Europe job pledge as Magna wins race for Vauxhall

Magna, the Canadian car parts maker, was poised last night to take over the stricken GM Europe, which includes Vauxhall in the UK.

British union leader Tony Woodley told the Guardian that the planned take-over would result in the eventual closure of Vauxhall's van plant at Luton in Bedfordshire, which employs about 1,500 workers. "I know what Magna's plans are about. Luton has no future," he said. "This news is nothing to shout about."

The Magna consortium is believed to include Oleg Deripaska, the Russian oligarch who infamously met business secretary Lord Mandelson on a yacht in Corfu last summer. The proposed deal could see some Opel/Vauxhall van production shift to Russia, where Deripaska's commercial vehicle manufacturer Gaz is based. A spokesman for Deripaska in London could not confirm his involvement.

It will be weeks before it is confirmed which GM Europe plants will close. But the future of the Luton plant now looks doubtful beyond 2012, when existing production commitments expire, according to Woodley and other industry sources.

But Lord Mandelson, the UK business secretary, who this week said he had received categorical assurances from bidders that Vauxhall's plants at Luton and Ellesmere Port would not be sacrificed to German interests, told Sky News last night: "I will be seeking from [Magna] reinforcement of the commitment they gave to me to continue production by Vauxhall here in the UK."

Opel/Vauxhall, which took over GM Europe's assets last week, has been locked in tortuous negotiations with the German government, which has led talks over the group's future, and prospective bidders. Magna has plans to axe 2,500 jobs in Germany, according to reports.