Vauxhall Owner's Huge Loss Could Hit Jobs

The US owner of Vauxhall, General Motors, has announced large financial losses in Europe, sparking fears jobs could be axed.

General Motors (GM) said it made $8.3bn (£5.3bn) of profits globally in 2011 but that its European operations lost $700m (£447m) and current restructuring needs to go further.

The company has 10 manufacturing plants across Europe where it employs tens of thousands of workers.

These include the Vauxhall factory at Ellesmere Port in Cheshire, which makes the Astra and has 2,100 staff.

There is also a Vauxhall plant at Luton where commercial vehicles are made. It has a workforce of 1,200.

There has been no official comment on restructuring plans - GM has only said it is "working hard to return Europe to profitability".

But General Motors is reportedly aiming to reduce capacity across Europe by around 400,000 cars a year - the equivalent of two factories' output.

However, it is not certain at this stage that any plants will close.

Sky News has learned the chairman of Opel, Steve Girsky, met Business Secretary Vince Cable and the head of the Unite union, Len McCluskey, "a few weeks ago" to tell them of the company's plans.

There has been concern for some time that over-capacity in the European car market could lead to plant closures.

Three years ago, GM attempted to sell off its loss-making European division.

Speaking on Jeff Randall Live, motor industry expert Jay Nagley said: "Vauxhall/Opel never took the tough decisions, they always kept thinking the next new model would boost sales, that they did not have to close plants.

"When the recession came, they started losing huge amounts of money and the one token effort they have made in closing a factory in Antwerp is not enough."

Mr Nagley explained: "It is impossible to see how you could take out that much capacity without closing a factory.

"The fact is, at the moment it is thought that their factory is running at about 70% capacity and even some of the cars that they are making are having to be discounted heavily to be sold.

"There is a huge amount of capacity that needs to be taken out.

"The rule of thumb in the car industry is, if you cannot run your car factories at 80% and get most of your theoretic retail price, without having to give too much discounts, you are losing money and you have to do something about it."

Mr Nagley told Jeff Randall Live that Vauxhall's Ellesmere Port plant is very efficient and productive.

He added: "It would be something of a travesty if that was one of the ones in the firing line."

A Vauxhall and GM spokesperson told Sky News: "General Motors and Vauxhall are, and have always been, in regular discussion with Government.

"Management, the Works Council and the Supervisory Board of Opel/Vauxhall are jointly discussing a strategy to get General Motors' European unit, Opel/Vauxhall, profitable again.

"Our employees and the public will be kept informed as decisions are being taken."

Any impact on the UK plants would weaken the country's car manufacturing output at a time of crucial recovery.

The latest figures, for January, released by the Society of Motor Manufacturers and Traders (SMMT) highlighted the biggest rise for 16 months and an eighth consecutive increase.

A total of 127,382 cars were made in the UK over the month - a 15.6% rise on the January 2011 total.

85% of the vehicles went to export.

However, commercial vehicle production dipped slightly.