Unions seek assurances over Vauxhall plant’s future in wake of 400 job cuts

Unions representing car-making staff at Vauxhall are demanding the company’s parent guarantees future investment in the UK business after it announced hundreds of job cuts at its main British plant.

France’s PSA Group – which bought Vauxhall and Opel from GM in a £1.9bn deal in August – said it would shed 400 of the 1,800 staff at the Ellesmere Port plant in Cheshire where the Astra is built.

Union Unite said it was now seeking meetings with PSA chiefs and the Government in an attempt to secure investment at the plant.

Len McCluskey, general secretary of Unite called the redundancies, which will take place by the end of the year,  a “major blow to the automotive industry and its supply chain”.

PSA said the job cuts – which it hopes can be conducted on a voluntary basis – were the result of falling demand as hatchbacks such as the Astra lose ground to SUVs, along with higher production costs in the UK.

“Facing challenging European market conditions and a declining passenger car market, Vauxhall needs to adjust production volumes at its Ellesmere Port production facility to the current level of demand and to improve its performance, in order to protect its future,” Vauxhall said in a statement.

 “Current manufacturing costs at Ellesmere Port are significantly higher than those of the benchmark plants of the PSA Group in France. The teams are conscious of the need to accelerate the recovery of plant productivity in order to meet the challenges ahead.”

Ellesmere Port is one of the biggest car plants in Britain. Last year, the company built almost 120,000 Astras at the factory. The four millionth Astra rolled off its production line in September.

While the Astra remains popular in the UK, ranking sixth in the sales chart, its market segment is being squeezed as SUVs grow in popularity. Some analysts believe that SUVs could soon be the largest segment in the market.

There have been concerns about the future of Vauxhall staff since it emerged in February that PSA was in talks about buying GM’s loss-making UK and European marques.

Under plans in place as the sale was going through, the Astra was slated to remain in production at Ellesmere Port until 2021, with the Vivaro van, which is made at Vauxhall’s Luton plant, scheduled to run there until 2025.

Carlos Tavares, the chief executive of PSA who is known for his cost-cutting, intimated to Business Secretary Greg Clark that “commitments to the UK plants would be honoured” as the deal was going through.

However, Mr Tavares also used a PSA investor briefing at the time to point out that Vauxhall and Opel, which have not been in profit since 1999, “could not keep making red ink, it is not sustainable”.

Source: The Telegraph