Unions at the Vauxhall plant at Ellesmere Port, Merseyside will have no doubt looked on enviously at their colleagues in Luton today.
PSA Group, which bought Vauxhall and sister German brand Opel from the US giant General Motors in August 2017, has announced major investment in the Luton plant.
The next generation Vivaro van will be built at Luton, and production will be revamped up from 60,000 vehicles a year to 100,000, securing the plant’s future for at least the next decade.
However at Ellesmere Port, home of the Vauxhall Astra, the wait, and the uncertainty with it, continues. And it could continue for some time – PSA head Carlos Tavares has said that a decision on the plant’s future needs to be taken “soon.” But that soon is 2020, the deadline to make decisions about the next Astra, expected to replace the current model in around 2023.
Concerns for the future of both UK plants were sparked as soon as PSA took over – the French firm, parent of Peugeot and Citroën, has not been afraid to shut its British factories before, pulling Peugeot production out of Coventry in 2006. Where once the sprawling Ryton and Stoke plants stood are now new industrial units and housing estates.
Cost cutting essential
As soon as PSA took over Vauxhall and Opel in 2017, it made clear that operating costs at the two UK plants were higher than their equivalents in mainland Europe and cost cutting has been underway since. The Ellesmere Port workforce of around 1,800 was cut by 400 in October, and a further 250 posts went in January.
Luton has also been making cost cuts – at the announcement of the Vivaro investment, thought to be worth around £100m with the UK Government contributing £9m, Tavares stated that the plant has reduced its annual running costs by around 17%. But to match other plants in Europe, it needs to find another 20%.
It wasn’t the cost-cutting that swung the deal for Luton – a major reason PSA decided to put new money into the UK, instead of competing sites in Germany and Poland, was due to the high expense of installing a new paint shop at the other locations, whereas Luton already has one.
Brexit is also weighing heavily on PSA’s mind. Tavares admitted at the announcement that the investment had been made “despite the Brexit uncertainty,” and speaking to the BBC at the Geneva motor show in March he said that continuing uncertainty undermines Ellesmere Port’s chances of future investment.
“No one is going to make huge investments without knowing what will be the final competitiveness of the Brexit outcome,” Tavares argued.
Union pressure
Unions at Vauxhall have welcomed the Luton news, but urged PSA to make a similar decision at Ellesmere Port. “The investment into Luton is very welcome, but we do expect to hear of similar plans for Ellesmere Port, where the workforce has been just as loyal and is just as deserving of a secure future but continues to live with a cloud hanging over it,” said general secretary of the Unite union, Len McCluskey.
Earlier, Mr McCluskey had insisted that it was in PSA’s interest to continue making cars in the UK. “The UK market is vitally important to Peugeot and if he wants to protect that market share he should openly commit to new models in both Ellesmere Port and Luton,” he said.
“Our Vauxhall plants are among the most productive in the PSA family, and the products our members make are among the most popular vehicles in the country.”
Despite the strong words, for now all the Ellesmere Port workforce can do is to continue to cut costs, and to wait…
