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General Motors (GM), the ailing automotive giant, has filed for Chapter 11 bankruptcy protection shortly after selling its European arm of Opel/Vauxhall to Canadian parts and assembly group Magna.

Since last week, GM executives have been in a race against the clock to sell off assets in an attempt to fast-track bankruptcy. The company  is expected to undergo a radical restructure and it is believed that the Obama administration will own as much as 73% when it emerges from Chapter 11.

Despite the sale of Opel/Vauxhall, there are growing fears that workforces at UK production plants in Luton (where the Vauxhall Vivaro and Renault Trafic are made) and Ellesmere Port (where the Astravan is produced) could be cut or the plants even closed altogether.

Business secretary Peter Mandelson has moved to quell fears of widespread production cuts, saying that GM executives have pledged their commitment to keeping Vauxhall production in the UK. However, he stopped short of offering any reassurances over job cuts.

Mandelson added that Magna had been vague regarding its plan for  the business as well as the long-term future of all Vauxhall staff. He also said the sale to Magna could have a catastrophic effect on the production contract at Luton between Vauxhall and Nissan Renault.

Mandelson says: "These are among the many details of Magna's plans that we have to discuss with them and tie down. If they want British government to help underwrite this new company going forward, they are going to have to demonstrate what's in this new arrangement for Britain, for British production and British workers."

Magna said it would inject roughly $415m (£253m) into GM Europe; the German government has agreed to provide a bridging loan worth $2.1bn (£1.3bn) to help finance the deal.