AUTO HEADLINES

UK fights for Vauxhall as GM bankruptcy looms

Business secretary Lord Mandelson has held “substantial telephone conversations” with GM amid final negotiations with bidders for its European arm.

The Government has explicitly linked any financial support for the spin-off of General Motors’ European operations to the future of its two UK car plants in Luton and Ellesmere Port.

Britain is lobbying to prevent the German government from bowing to election-year pressure with a pledge to protect domestic jobs at the expense of Vauxhall’s UK plants.

The three main bidders for GM’s European arm are Fiat, Canadian car parts maker Magna and financial investor RHJ. There are claims that whichever bidder wins, up to 10,000 jobs could be cut at Vauxhall/Opel.

Beijing Automotive Industry Corp has emerged as a fourth contender for the business and insiders claim it will try to avoid job cuts in Germany for two years.

As the winning bid is being decided, General Motors has acknowledged that it has failed to secure agreement from holders of $27bn in bonds for a contentious debt-for-equity offer, and said that its directors will meet “to discuss GM’s next steps”.

The setback, which was widely expected, clears the way for the carmaker to seek bankruptcy protection on or before June 1, the deadline set by the US government for GM to meet conditions for future financial aid, including the debt-exchange.

A General Motors bankruptcy would be the largest ever in US industrial history. (Daily Telegraph; Daily Mail; Daily Express; The Guardian: FT.com; just-auto.com: May 27)

Citroen issues termination notices in expansion plan

Citroen UK has issued two-year termination notices to all its 640 sales and service centres and parts distributors this week.

The manufacturer says the move is part of an ambitious sales growth and enhanced customer care strategy – plus the need to safeguard profitability.

The aim is to have fewer dealers, doing a better job and making more money, the firm said.

The majority of Citroen’s 200 sales outlets will be unaffected, but 20 have been told the carmaker may end their contracts, unless they improve customer care and/or sales performance against targets in 2009 and 2010.

Another 20 has been told the territory they represent is no longer viable. (am-online: May 27)

Football and driving don’t mix

Listening to football commentary on the radio while driving can be a dangerous distraction, scientists have warned.

They found that listeners’ driving became much more erratic when they were listening to the match.

Tests carried out using a driving simulator also showed that the pace of the game, goals and penalty decisions affected the ability and concentration of fans behind the wheel. (Daily Telegraph; Daily Mail: May 27)