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Rhj To Cut 10,000 Jobs In Bid For Vauxhall Owner

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RHJ to cut 10,000 jobs in bid for Vauxhall owner

The future of 5,000 workers at Vauxhall hung in the balance today after an American private equity group said that it would cut 10,000 jobs across Europe should it win control of the carmaker.

Ripplewood - the US private equity firm whose European business RHJ International is trying to bid for GM Europe - said that around 3,900 jobs would be lost in Germany. The group did not specify where the remaining 6,100 would be cut.

GM Europe - the car maker which controls Opel in Germany and Vauxhall in the UK - is currently on the auction block after its American parent General Motors was forced to carve up its global business earlier this year when it almost went bust.

In an interview in a German newspaper today, RHJ executive director, Leonhard Fischer, said that while he foresaw around 10,000 job cuts, “we are going to keep the four German factories†which belong to Opel open.

He added: “A detailed contract will be ready by the end of the week.â€

The Belgian group aims to save €800 million per year by cutting staff, Mr Fischer said.

General Motors Europe employs around 50,000 workers at several European countries.

RHJ is aiming to buy 50.1 percent of GM Europe and is ready to commit €275 million for the stake.

Magna International, the Canadian car parts supplier, has already been chosen by the German Government as the preferred bidder for GM Europe, and it is completing due diligence before tabling a formal, detailed offer. Magna is arguing with the American parent over intellectual property rights.

At the same, RHJ International has been trying to pull together a competing offer for GM Europe. The Belgian industrial group is the first of the two potential bidders to reveal specific numbers about job cuts. In the past, Magna has only said publicly that any job cuts would be significant. Unions believe that Magna is also planning to cut around 10,000 jobs but point out that the difference between any of the final bids will be in which country the axe will fall.

Both Magna and RHJ need state aid before they will commit to buying GM Europe. Germany and Britain have both said that they will offer some form of assistance but the value of it will depend on the type of commitments promised by a bidder for jobs within their own national borders.

Vauxhall has two factories in the UK - Ellesmere Port in Cheshire where the Astra is made - and Luton, where the Vivaro commercial van is manufactured. Between them, Vauxhall employs around 5,000 workers in the UK.

Lord Mandelson, the Business Secretary, has made it clear that he expects some job cuts at Vauxhall but is trying to extract commitments for the bulk of the car’s workforce.

Governments in Belgium and Britain have expressed concern that Germany, which is involved in talks because it is set to provide state aid for a deal, would seek the best deal for domestic Opel plants at the expense of others.

RHJ’s leading shareholder, with a 15 per cent stake, is Timothy Collin, head of the US investment fund Ripplewood.

In late May, General Motors and the Canadian auto parts group Magna signed a non binding letter of intent backed by German officials, and was to see Magna buy 55 percent of Opel with help from the Russian bank Sberbank.

Magna is now expected to present a new detailed offer.

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sales halve, so half the jobs go.

logical init.

advice to current workers: the writing is on the wall!

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