General Motors (GM) Close To Extending Its Partnership With Renault On Its Luton Plant

Telegraph has cited the chief executive of General Motors (NYSE: GM) as saying that the company is about to sign a joint-venture agreement that will help it in keeping its Luton van plant functioning until after 2013.

GM Europe is operating its Luton plant through a partnership with Renault until 2013. However, its future beyond 2013 has been bleak ever since GM opted for Chapter 11 bankruptcy protection last year and initiated significant restructuring initiatives for its European operations.

With Nick Reilly, chief executive of GM Europe, stating that he was close to ending his discussions with Renault about extending their deal, the bleakness seems to have dissipated.

According to Mr Reilly, the UK government has so far provided only €300 million (£270 million) of loan guarantees to protect the future of GM-owned Vauxhall, which employs 5,000 people in the country. The government had also asked the company’s American parent to invest an additional €400 million into the business.

To finance the restructuring of GM, Europe GM had initially sought to raise funds amounting to €3.3 billion through its own efforts and from European governments. Later GM had announced that it would treble its own investment from €600 million to €1.9 billion.

Read more from Benzinga's Company news.