Magna, Union Reach Deal To Keep U.K. Plants

LONDON (AP) -- Britain's Unite union said Tuesday it has agreed to a deal with Canadian auto parts maker Magna International to secure the future of two U.K. factories in return for cost savings, including a two-year pay freeze.

The two Vauxhall plants are part of Opel, the European unit of General Motors Co. which was sold to a consortium of Magna and Russian bank Sberbank last month.

Unite said that the deal committed Magna to retaining the Vauxhall plants at Ellesmere Port and Luton, which together employ around 5,500 workers, until at least 2013.

Up to 600 jobs are likely to be lost through voluntary redundancies, around half the positions that the union had originally feared would be axed. There will be no compulsory redundancies at either plant.

"This agreement removes the uncertainty surrounding our plants and our people's jobs," said Unite joint leader Tony Woodley. "It gives both plants job security and a future through to 2013, providing a good basis for a long-term future beyond that."

Under the deal, Ellesmere Port will produce the next generation Astra, set for 2016, subject to maintaining its competitive position.

The Luton van plant will be maintained as a key site within Magna's UK portfolio, and the Canadian firm will seek "any other possibility on product" for the plant, the union said.

Spokespersons from Magna International Europe and Vauxhall in the U.K. did not immediately respond to requests for comment.

The British government was criticized for failing to guarantee jobs ahead of the Magna takeover. In contrast, Germany -- which brokered the deal because it hosts most of Opel's production -- received specific commitments from Magna about safeguarding German jobs.

Spain, where Opel also has factories, has complained about Magna's intentions to move some Spanish jobs to Germany.

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