General Motors (GM) UK, the owner of Vauxhall, offered nearly half its workforce an eight-month sabbatical yesterday as its parent company battled in vain for billions of dollars in emergency funding from the US Government.

GM UK has offered workers at its plant at Ellesmere Port in Merseyside the option of taking up to eight months leave between January 1 and September 1 next year, on 30 per cent pay.

GM employs about 5,500 people in the UK, with about 2,200 staff at Ellesmere Port. Some key workers may be exempt from the cost-cutting scheme.

Fears over the future of the 5,500 workers accelerated today after the US Senate last night refused to back a $14 billion bailout fund for America's "Big Three" carmakers - GM, Chrysler and Ford.

It is now thought that GM and Chrysler are just days away from filing for bankruptcy.

Both companies have warned that they might run out of cash by the end of the year without federal help and Ford has also cautioned that the collapse of one of its rivals would drag it down into insolvency.

There have been fears that Vauxhall and Opel, GM's European subsidiary, might be particularly vulnerable if the American parent company goes bust.

A spokesman for GM UK said today that the company had not yet made an individual appeal to UK Government for support. "We haven't done it, we have no intention of doing that in the short term, but it's one option," he said. "It is the ultimate option."

It is thought that GM UK is also considering shorter shifts, four-day weeks and pay cuts to avoid job losses. A spokesman for GM UK said: "We clearly have a situation where we need to match supply with demand all the time."

He added: "Redundancies are not on the table at the moment, at least not forced redundancies."

The company has already been slowing production, both at Ellesmere Port, which makes the Vauxhall Astra, and at its other main plant in Luton, where it produces the Vauxhall Vivrano, Renault Trafic and Nissan Primastar.

It has been operating a system where employees bank their hours: while business has been slow in recent months, staff may have been dismissed from shifts on base pay, but will owe the company that time in the future when production increases.

Between September and the end of the year the company will have had 18 down days, closing its plants completely.

It has also extended its closed periods over Christmas at both plants. Under normal circumstances it would be closed for a fortnight over Christmas and the New Year, but this year, Luton will close next Tuesday, December 16 until January 5, and Ellesmere Port workers go home today and will not return to work until Friday, January 12.

Across the continent, GM Europe needs to save €750 million next year, and is in talks with management and union representatives to try to achieve this.

The announcement about Ellesmere Port follows production cuts by other vehicle manufacturers in the UK.

Honda is to halt production at its plant in Swindon in February and March next year and BMW announced a four-week shutdown at its plant in Oxford, which makes the Mini.

Jaguar Land Rover, owned by Tata, the Indian conglomerate, said in November that it was seeking a further 300 to 400 job cuts, in addition to the 200 it announced in October.

Also in October, Nissan announced a two-week shutdown at its Sunderland plant, Toyota halted the night shift at its Derby works, Ford said that it would move to a four-day week until Christmas at its Transit van plant in Southampton, and Land Rover did the same in Solihull. Bentley’s factory in Crewe moved to a three-day week.

A spokeswoman for the Society for Motor Manufacturers and Traders (SMMT), said: "The motor industry wherever possible will stand down from manufacturing rather than do sweeping redundancies because of the level of skills needed in that sector."

"[The industry is] taking measures to ensure that when the upturn comes we still have the workforce in place."

Concerns about the UK car industry intensified in September when figures from the SMMT showed that new car sales had fallen to their lowest level since 1966.

The SMMT has led industry-wide appeals to Government for improved access to credit for consumers and businesses, to stimulate car purchases and to safeguard the wider supply chain which serves the industry.

About 850,000 jobs in the UK are dependent on the automotive industry, including workers in manufacturing, supply and retailing roles.

However, it is thought that individual car manufacturers have made appeals to Government to seek support. Last month it was reported that Land Rover Jaguar had appealed for a £1 billion bailout.

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