Sector: Automotive

Toyota is to invest $50 million (£35 million) in Tesla Motors, the small but ambitious US electric car concern, with the two companies having announced a joint partnership to build electric vehicles.

This investment will bring Toyota, the world’s largest car-maker, a 2.5 per cent stake in Tesla, which plans to build its new saloon model at a Toyota factory near San Francisco, thereby benefiting from the mass production know-how of the Asian car giant, which in turn will have access to the electric battery expertise of Tesla.

Analysts see the deal as potentially boosting the US reputation of Toyota, which has been dented by a number of mass recalls over gremlins within braking systems and accelerator pedals.

Elsewhere in the recession-hit automotive space, workers at Vauxhall’s plants in Luton and Ellesmere Port have agreed to a two-year pay freeze, as part of a Europe-wide restructuring deal.

Unite, the union representing Vauxhall workers, has inked an agreement with General Motors, the owner of Opel/Vauxhall in Europe, with workers in Germany having signed a similar deal. General Motors, plotting cuts across Europe, says the UK agreement alone will save it e26.5 million (£23.1 million).

Opel/Vauxhall chief executive Nick Reilly characterised these European agreements with the group’s workers as ‘important steps’ in the process of creating a new, sustainable company. ‘Employees demonstrated that they are ready and willing to contribute to the company’s future’, said Reilly, ‘when they are offered security and long-term prospects in return.’