The current contract between GM and Renault, which together developed and produce the Vauxhall Vivaro and Renault/Nissan Trafic models, comes to an end in 2013.

Vauxhall announced last year that it would continue working with Renault on a new generation of the Vivaro van - but at the time gave no guarantee that van assembly will continue at GM's Luton plant.

As Vauxhall spokesman Denis Chick warned last year: "This is just a step along the negotiation process that's been going on for a while on the replacement of the current vehicle... But at the moment anything about how it's built or where it's built is still under discussion.‹We can say nothing beyond that."

There was speculation last year that Renault's van assembly could be shifted to France (that has been since been confirmed). Along with the perception that British workers are easier to lay-off, this fuelled fears of another possible closure.

A long and deafening silence then ensued on the future of the plant.

Last summer, Vauxhall rejected some £270 million of loan guarantees that had been offered by the previous Labour government to help it through its European restructuring process, stating that it needed to concentrate on developing new technologies rather than entering more complex negotiations with the new coalition government.

And to help safeguard the Luton plant, Vauxhall workers agreed to a two-year pay freeze, and around 370 redundancies.

That seems to have done the trick. It's again a textbook case of unions and workers working flexibly, as they did during the recession, to safeguard jobs and encourage investment.

Add in the pruductivity of workers there, the efficiency of the plant, and a competitive exchange rate (for now at least) and you can see why GM chose Luton.

The news will come as a huge relief for the workers at Luton given fears over a possible closure.

As one well respected auto journalist put it recently: "I suspect... we will see a predictable process: closure announcement, union leader and politician hand-wringing, token strike, maybe a union leaders' trip to Paris, last unit off line, TV news coverage of workers leaving plant for last time, wrecking ball".

Thankfully, this time he was wrong. Hats off to GM and to Luton workers for pulling this off.

Professor David Bailey works at Coventry University Business School.