Socialist Worker

New GM deal threatens 5,500 workers’ livelihoods

by Simon Basketter
Issue No. 2154

General Motors (GM), the US firm which owns Vauxhall, has filed for bankruptcy protection – making it one of the biggest corporate failures in US history.

GM’s European arm is likely to avoid bankruptcy following a deal by car parts maker Magna International to buy GM Europe’s Vauxhall and Opel brands.

But this will lead to job cuts at Vauxhall plants in Luton and Ellesmere Port, which employ 5,500 people.

Business secretary Lord Mandelson bizarrely said that union criticism had hindered his negotiations.

He whined, “I’ve had to face over the last few days constant attack and friendly fire from behind me.” He criticised “the unions who have misrepresented my and the government’s actions”.

In fact, the criticism may not have been harsh enough. Magna is backed by Russia’s state-run Sberbank and Oleg Deripaska’s firm Gaz.

Lord Mandelson and Deripaska have form.

Their relationship sparked controversy last year after it emerged that Mandelson stayed on the billionaire’s £80 million yacht off Corfu when he was a European Union commissioner.

It was claimed that Mandelson signed off on trade concessions to the tycoon – a charge both men denied.

Earlier this year Mandelson gave van maker LDV, which Deripaska controls, a £5 million handout to aid Malaysian firm Westar’ in its rescue of the company.

This had no effect as the deal fell through this week, threatening hundreds of jobs in Birmingham.


In the US a “New GM” will be shrunk to a fraction of its current size and freed from any obligation to pay decent wages, pensions or retired workers’ health benefits.

Once profits can be guaranteed the government will sell the company to private investors at a bargain price.

The wage and benefit concessions imposed on car workers – with the acceptance of the United Auto Workers (UAW) union – will freeze wages, substantially reduce breaks and holidays and remove health benefits.

The UAW, which will be handed 17.5 percent share of the “New GM,” will find itself attacking its own members.

Car workers here could face a similar prospect. Criticising Mandelson is a start. But whether the unions are prepared to fight for jobs in Luton and Ellesmere Port is the real question.

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Tue 2 Jun 2009, 18:21 BST
Issue No. 2154
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