Magna likely to shed 10,500 Opel, Vauxhall jobs in Europe

Confirming the fears of pessimists who were against the General Motors (GM)-Magna International deal, the Canadian car parts manufacturer said it may cut as many as 10,500 jobs at Adam Opel GmbH and Vauxhall in Europe in the coming 12 months, much more than what it said while entering into the deal.

Magna's co-chief executive Siegfried Wolf said in Frankfurt yesterday that about 4,000 job losses would be made in Germany.

Opel employs a total of 54,500 workers across Europe, almost half of it based in Germany, while Vauxhall has 5,500 workers at its two British plants in Luton and Ellesmere Port.

The company, along with its partner Sberbank of Russia had entered into a deal with GM last week to acquire 55 per cent stake in the beleaguered American carmaker's European units (See: Magna, Sberbank win GM's Opel, Vauxhall units).

One of the main reasons for Magna's choice as the preferred bidder was its promise that it would keep all four Opel plants in Germany open.

Germany has already given 1.5 billion euros ($2.18 billion) to Opel, and has agreed to chip in additional 3 billion euros in loan guarantees for Magna to protect thousands of German jobs.