General Motors expected to file for Chapter 11
Many reports over the weekend have speculated that General Motors (GM) is expected to file for Chapter 11 bankruptcy tomorrow.
The century-old car maker, which was once the biggest company in the world, reaches its deadline tomorrow of restructuring the business in order to achieve a multi-billion dollar loan from the Government to avoid bankruptcy protection.
So far, the company has received $15.4 billion in Government loans to prevent it from collapse, in the wake of plummeting sales.
The weekend has been spent with executives and politicians in the USA and Europe discussing rescue packages, which has seen Canada’s Magna agreeing to rescue GM’s Germany operations. GM’s European operations also includes UK’s Vauxhall.
Vauxhall has plants in Ellesmere Port (Cheshire) and Luton (Bedfordshire) but Business Secretary, Lord Peter Mandelson, told Sky News last week that “there is no danger of Vauxhall’s UK plants closing” but some of the 5,500-strong workforce could lose their jobs.
However, Lord Mandelson is hoping to secure a meeting with Magna in search of “a cast-iron guarantee” that no jobs will be lost at the UK plants.
Analysts believe Vauxhall’s Luton plant is the most vulnerable to job losses, the plant has a workforce of around 1,500.
Yesterday, the German Government reached a deal with Magna which will see the Canadian firm become the car maker’s new owner.
However, the deal between Magna and the German Government has cast doubts over the UK deal and the future of Vauxhall workers. It is expected that Magna will cut jobs but no details have yet been unveiled.