The BBC’s Chanel 4 News is reporting that thousands of jobs at two UK car plants could be at risk as a result of a worldwide sales slump. General Motors, the world’s biggest car company which owns Vauxhall, said it will be bankrupt within months unless it gets an emergency cash injection from the US government to help it during the global financial crisis.
The firm said it had called off merger talks with Chrysler and was asking the government for help after using up $6.9 billion (£4.4 billion) in the third quarter of 2008.
The company employs around 5,000 workers at plants in Luton and Ellesmere Port, Cheshire, which produce around 215,000 vehicles a year.
Meanwhile, German car giant BMW announced that production of the Mini was to be curtailed, with workers at plants at Oxford and Swindon told the two-week Christmas shutdown would be extended to four weeks this year as a result of the credit crunch.
The motor industry has been hit by falling demand across the world, with sales of new cars slumping to their lowest level in 25 years.
The news from BMW follows an announcement earlier by Jaguar Land Rover that a voluntary redundancy scheme is to be extended to hundreds of workers.
GM said it planned to make more job cuts, including another 5,500 salaried and factory workers.But the Detroit-based firm warned that this alone would not be enough to keep it afloat.
GM chairman and chief executive officer Rick Wagoner said the firm would “take every action” possible to avoid bankruptcy.
GM’s announcement came hours after Ford revealed it had lost $129 million (£82.4 million) in the third quarter after burning through $7.7billion (£4.9 billion) in cash.
The car company said it would cut another 2,260 white-collar workers in North America, but added it could keep going through 2009.
On Thursday, the chiefs of Ford, GM and Chrysler, known as Detroit’s “big three”, asked the US Congress for some $50 billion (£31.8 billion) in federal aid to help them survive the credit crunch.