GM Europe to run out of money

Top General Motors (GM) executives have warned that the European divisions of the US based firm are within weeks of collapse if European governments do not step in and help with a bailout.

GM Europe includes Saab in Sweden, Vauxhall in Britain and GM’s German brand Opel.

Fritz Henderson, GM’s chief operating officer, has called on governments to take immediate action as it could run out of money in April or May and some 300,000 jobs could be lost across the continent.

The British government has given a positive response to offer assistance to the carmaker and said not to just rely on Germany, where GM Europe has the strongest foothold through the Opel brand.

As things stand the current crisis is likely to have a significant impact on the UK, as around 5,000 staff are employed by Vauxhall in the UK at plants in Ellesmere Port and Luton and the greatest fear is that these could be the first to be axed in a bid to cut costs, even though GM has announced on numerous occasions that the plants are efficient and working well.

The wider implications are far more expansive as GM directly employs 50,000 people in Europe, although another 250,000 jobs are in danger within the supply chain.

GM has been seriously affected by the credit crunch and a drop in consumer confidence and in the US has reported a $31bn loss for 2008.

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