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GENERAL MOTORS SELLS VAUXHALL

CAR giant General Motors (GM) yesterday revealed it is selling a 55 per cent stake in Vauxhall and Opel to Canadian car parts maker Magna International.<br /><br />The announcement ends a long bidding war for its European arm between Magna, which is backed by Russian bank Sberbank, and Belgian group RHJ International and Beijing Automotive.<br /><br />The Opel trust, which controls 65 per cent of GM Europe, approved the deal, saying it was in the best interests of Opel and Vauxhall because Magna was likely to provide more job security for GM&rsquo;s 54,500 workers.<br /><br />Magna and Sberbank will take on more than half of the new GM Europe, employees will hold 10 per cent of the company, while GM, which is 61 per cent owned by the US government, will keep a 35 per cent stake.<br /><br />Magna has said it is committed to keeping open the four plants in Germany, where 25,000 people work for Opel.<br /><br />Yesterday, GM also said Magna was planning to keep running the Ellesmere Port plant where the new Astra will be produced.<br /><br />It also pledged to continue production of the Vivaro van at Luton until 2013 at least, and promised to consider economically viable ways of keeping the Luton plant open after that.<br /><br />But UK unions are still worried about the future of the 5,500 staff at the Ellesmere Port and Luton plants.<br /><br />&ldquo;The uncertainty surrounding the ownership of Vauxhall is now over, but the uncertainty surrounding the long-term future of Britain&rsquo;s plants will continue,&rdquo; Unite union&rsquo;s Tony Woodley said.<br /><br />At least 10,000 of the 54,500 Opel and Vauxhall jobs in Europe are now expected to be slashed under a massive restructuring.<br /><br />But last night business secretary Lord Mandelson said he was confident Magna would not close British factories.<br /><br />&ldquo;The uncertainty surrounding Vauxhall&rsquo;s future has been removed by this announcement, and I welcome that,&rdquo; he said.<br /><br />He added: &ldquo;If you were talking about plants, then I think the German plants are safe, I think the British plants are safe.&rdquo;<br /><br />The announcement is also seen as a win for German chancellor Angela Merkel, who had thrown her weight behind Magna as a bidder.<br /><br />&nbsp;The German government, which is facing an election this year, gave Opel a &euro;1.5bn (&pound;1.3) loan, and is giving Magna an additional &euro;3.5bn.<br /><br />Details of the deal, including the technicalities of the German government&rsquo;s finance package, still need to be finalised, GM said. The carmaker also needs confirmation from unions at Opel that they will support Magna&rsquo;s cost-cutting proposals.<br /><br />GM emerged from bankruptcy in July and is selling its European arm as part of a massive restructuring operation. ALLISTERHEATH:P2