GM Europe Lands Loan Guarantee from Britain

In what was called complex talks and negotiations, the final outcome is GM Motors Europe landed a 270 million pound loan guarantee from the British government to shore up the operations in Britain and the rest of Europe.

"We need Vauxhall to thrive as part of Britain's automotive manufacturing base, and following our negotiations with GM Europe I am confident it will do so," Business Secretary Peter Mandelson said.

Vauxhall refers to automobile plants in the region. Opel plants are also considered crucial going forward in the manufacturing sector.

This is particulary important to Britain, as they have two Vauxhall plants in the UK, which together employ about 4,700 workers.

On the European side, GM is asking for about 2.7 billion euros in aid from countries with Vauxhall and Opel plants in them. Plans to cut jobs and production capacity is part of the strategy for the company to be profitable, and that will take compromise if it is to work. 

Just throwing money at the circumstance would only be a band-aid though, as demand is still the underlying factor of success of any business, as well as quality and competitive pricing. If that isn't in place all the money the world won't help, even if it gives a temporary, short-term boost.

According to the department headed by Mandelson, talks continue on with GM and other European governments to agree upon the details and get the business plan operational.