Mandelson demands talks over Vauxhall's future as Germany seethes

Business secretary Lord Mandelson has demanded urgent talks with General Motors following the US carmaker's decision to scrap its plans to sell Vauxhall. GM's surprise move last night has delighted UK union leaders but enraged German politicians and unions – who are threatening industrial action tomorrow in protest. The UK government has already indicated it may be prepared to offer GM financial support to help guarantee the long-term future of Britain's Vauxhall factories. "I am keen for very early discussions with GM over their plans for the business and how they will affect British plants and workers," said Mandelson this morning. "I have always said that if the right long-term sustainable solution is identified, then the government would be willing to support this."The German government called on GM to present a restructuring plan for its European arm, which includes Germany's Opel and Britain's Vauxhall brands, as soon as possible. It described the car giant's sudden U-turn as "totally unacceptable". Opel's works council has called for workers to down tools across Europe to protest against GM's decision not to sell Opel to the Magna-Sberbank consortium. Klaus Franz, Opel's top employee representative, said that brief "warning strikes" were set to begin tomorrow at Opel's four German plants, and would spread to other Opel locations in Europe on Friday. After a six-hour meeting in Detroit, the GM board decided last night to ditch the planned sale of its European business to Canadian car parts maker Magna International and its Russian partner Sberbank – a deal which had threatened thousands of jobs at factories across Europe. It is not clear what impact the decision will have on 5,500 workers employed by Vauxhall in the UK, mainly at Ellesmere Port and Luton. Workers arriving at the plants this morning expressed "cautious optimism" that the U-turn would be better for the long-term security of their jobs. Tony Woodley, joint leader of the Unite union, and a former Vauxhall worker himself, said the move was a "fantastic decision", adding: "There's no logic in breaking up the company. I believe it is the right decision in spite of a good deal that we'd struck with Magna. "It is the best decision for Britain and our plants. I am absolutely delighted that General Motors have finally done the right thing for them and for us."John Featherstone, Unite's convenor at Ellesmere Port, said he hoped Mandelson would now demand that GM gives guarantees about future production. About 2,200 workers are employed at Ellesmere Port, producing the Astra on two shifts, but Featherstone said he hoped the plant could step up to three shifts. GM's president and chief executive Fritz Henderson said encouraging global sales figures and an improvement in the European business environment had prompted them to change their minds about offloading the European business, which employs 55,000 people. The German government, which had brokered the Magna deal by agreeing to provide €4.5bn (?4bn) in financial aid, is furious. It expects to get back the money it loaned GM to help loss-making Opel. Germany's economy minister, Rainer Bruederle, said in Berlin this morning: "We will get the taxpayer's money back."Juergen Reinholz, economy minister of Thuringia, one of the German states that has Opel factories, said GM had signalled it would pay back a €1.5bn bridging loan for Opel by the end of the month. There had been speculation that the Magna deal meant that Vauxhall's factories were more at risk of closure than their German counterparts, even though the two UK plants are some of GM Europe's most efficient. Instead of selling the operation to Magna, GM intends to spend €3bn on restructuring the division "in earnest" – a process still likely to involve government aid and that may yet lead to significant job cuts. The U-turn was greeted phlegmatically by Magna which had hoped to transform itself from a components player to an all-round vehicle manufacturer. Magna's chairman, Frank Stronach, told Canada's Globe and Mail that "life goes on". He added: "You take it as it comes and you go look for other opportunities."Monthly sales figures released yesterday provided an indication that business was improving. GM's US car sales in October were up 4% in comparison with the same month in 2008 – the first year-on-year rise since January last year.