Vauxhall and Opel get £270m UK loans guarantee
Business Secretary Lord Mandelson has announced a 300m-euro ($412m; £270m) loan guarantee to the European arm of General Motors (GM).
The money will help secure operations at the carmaker's two Vauxhall plants in the UK and those of Opel in Europe.
Lord Mandelson said he thought the move would secure the future of Vauxhall plants in the UK.
GM had planned to sell Opel after going into bankruptcy protection last year, but then changed its mind.
After announcing last week an increase in its investment in Opel and Vauxhall to 1.9bn euros, GM said it needed 2bn euros of loans and guarantees from European governments.
It has asked for about 60% of this total to come from Germany, where the majority of GM's European workers are based.
GM estimates that Opel - which includes the UK's Vauxhall business - needs 3.3bn euros to be turned around.
The US firm decided to keep Opel rather than sell it to Canadian car parts maker Magna, which Germany had supported.
The UK government loan will come from the government's Automotive Assistance Programme.
Vauxhall said it represented "a strong vote of confidence in UK automotive industry".
Luton concerns
GM 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 it confirmed earlier this year that more than 360 jobs were to go at Vauxhall's Bedfordshire van plant, 150 from its administrative department and 369 posts would be lost at its Luton plant.
There have been concerns about the future of the Luton plant - which makes the Vivaro commercial van - beyond the current contract, which ends in 2012-2013.
"It's too early to say what new product will replace the current production at Luton," Lord Mandelson said.
"But I have spoken to the head of GM Europe and he is working very hard... in finding a further product that can be produced at Luton."
Restructuring
GM also plans to invest 11bn euros "in a new product offensive" over the next five years
Opel plans to launch eight new models this year, and another four in 2011.
A big slump in sales during the global downturn forced GM into bankruptcy protection last summer, and it emerged 62%-owned by the US government.
It has since sold its Swedish brand Saab and closed a number of classic US car brands such as the Pontiac and Saturn.
Last month, it decided to wind down operations of the off-road Hummer brand after failing to complete a planned takeover by a Chinese firm.
Posted at 07:11PM Mar 12, 2010 by Kelly Board in Finance7 Company News | Comments[0]
January Sees Slump in Mortgage Agreements
The Council of Mortgage Lenders’ (CML) new figures have reiterated the fact that January has seen a downturn in the property market.
Mortgages agreed with house buyers fell by a huge 49% from December, this is thought to be due to the December rush to beat the reintroduction of the old stamp duty thresholds. There was only 32000 loans approved in the month of January.
The figures for first-time buyers fell even further, by a huge 54%. It has been a very slow start to the year according to Michael Coogan, General Director of CML.
"Lending volumes in January were low, but we had predicted this would happen due to the end of the stamp duty holiday distorting December's figures," he said.
"When December and January data are taken together, they show little change in underlying market conditions compared with recent months, with activity still slow but well up on the lows of a year earlier.
"We expect lending over the coming months to remain weak," he added.
It is also thought that the slump will last for over a month as expectations are that when the figures are released for February, they will only be slightly better than January, still staying relatively low though.
Posted at 01:05PM Mar 12, 2010 by Marc Stenton in Mortgages & Housing Market | Comments[0]
