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UK gives GM US$410mil loan guarantee for Vauxhall

Britain will give a 270mil pound (US$410mil) loan guarantee to General Motors to help keep its Vauxhall operations going in the country, a government official said on Fri.

That is well short of the euro 2bil (US$2.8bil) GM is seeking from European governments to help restructure Vauxhall and its other European unit, German-based Opel.

British Business Secretary Peter Mandelson said that talks were ongoing with GM Europe and other European governments to finalise the funding terms and the implementation of a business plan. Mandelson said the two Vauxhall factories in Britain are "excellent plants employing a first rate work force."

"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," he added.

General Motors abruptly abandoned a plan to sell the majority of Opel and Vauxhall to investors late last year, instead choosing to keep the European brands for itself.

It last week said it would triple its own funding for Opel and Vauxhall to euro 1.9bil and reduced the amount it was seeking from European governments after it became apparent they were unlikely to deliver the initially requested euro 2.7bil. - AP