Opel and PSA Group are assessing closure of a factory if market declines, with Ellesmere Port most likely to be under threat
Jim Holder
16 November 2018

Vauxhall may lose one of its two UK manufacturing plants if the market declines after the UK leaves the European Union, according to a report.

An unnamed source close to the brand told Bloomberg that the PSA Group, which took ownership of Opel and Vauxhall in 2017, is considering the best response to a potential drop in new car sales post-Brexit. One of the options under review is to close a factory here. 

Further options include stockpiling parts to avoid shortages if customs issues arise and bringing forward a summer shutdown, much like BMW has done with Mini's Oxford plant

If a plant closure is the favoured option, it's likely the axe will be brought down on Ellesmere Port. PSA has already highlighted deficiencies at the Cheshire facility, while Vauxhall's Luton factory had its fate secured for ten years back in April due to demand for capacity to build the Vivaro van. 

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Previously, PSA Group CEO Carlos Tavares stated that the Ellesmere Port plant must close the cost and quality gap between it and its European equivalents if it's to survive.

Speaking at the 2018 Geneva motor show, Tavares highlighted that the PSA Group's plants, including those that came as part of the Opel and Vauxhall acquisition, will all have an “equal and open” chance to demonstrate their competitiveness, but that there remains an issue of over-capacity that he needs to address.

Last year, 400 jobs were cut at Ellesmere Port, with company bosses saying the decision was taken due to 'market changes' rather than output or performance issues.

“Unfortunately, there was complacency for several decades, and now the gap between the UK and the Continental plants is significant,” he said. “But we see an opportunity in Brexit. While everything pauses to see what will happen with that, we will keep working. It gives us breathing space to improve competitiveness.”

Although Tavares hasn’t put a timeline on negotiations, he did highlight that other plants - and especially the workers’ unions at them - had already secured their futures by showing a flexibility to his needs to cut costs. “We need to reduce the total manufacturing costs significantly,” he said. “If you look at the plant in Zaragoza [in Spain], the unions demonstrated a high level of maturity in our negotiations and we agreed a deal to make the Corsa and electric Corsa there.

“Yes, the negotiations were difficult, but that is what it takes. When a company is complacent for decades it allows a gap to open. I'm not saying this to be difficult - it's the reality.”

Under the ownership of General Motors, Ellesmere Port was hailed as one of the highest-quality and efficient plants the firm operated. However, insiders say that benchmarking it against existing PSA plants has highlighted deficiencies.

The PSA Group is completed by the Citroën, DS and Peugeot brands.

“What I can promise is that everything will be benchmarked in an open and fair way,” said Tavares. "We will look at the best we have and measure against that, and find how to achieve that.”

Read more

Vauxhall axes 400 jobs at Ellesmere Port

PSA and Unite union in talks over future of UK factories

PSA Group plans to make Vauxhall and Opel profitable by 2020

Vauxhall Corsa EV to be launched in 2019

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Comments
34

6 March 2018

Goodbye Ellesmere Port.....

Steam cars are due a revival.

17 November 2018

...was better than GM's plants in Europe but is now bottom of the lot in the new PSA regime?

Yeah right, looks like Ryton all over again with the French "shit-scared" of closing a German or French plant for fear of the backlash.  I would like to think that brexit meant Britain standing up for Britons but Mrs May has proved that the establishment is still committed to shitting on its own doorstep.

6 March 2018

My Astra J CDTI tourer (built at that plant) has proven more durable than the nightmarish VAG diesels, Fiat diesels and BMW 2.0 TDs. 

Look at the classified or ebay, Spanish built Corsa's from 08-14 are riddled with engine failures etc (and being sold spares-or-repair), whereas the Astra's are proving strong vehicles.

Wonder why Senor Carlos wants to protect the Spanish plant?

16 November 2018
CWBROWN wrote:

My Astra J CDTI tourer (built at that plant) has proven more durable than the nightmarish VAG diesels, Fiat diesels and BMW 2.0 TDs. 

Look at the classified or ebay, Spanish built Corsa's from 08-14 are riddled with engine failures etc (and being sold spares-or-repair), whereas the Astra's are proving strong vehicles.

Wonder why Senor Carlos wants to protect the Spanish plant?

Not downplaying the workmanship of Ellesmere Port, but surely that's down to the engine which is shipped in in a crate? Comparing cars with different engines by their engine defects is comparing apples to oranges (or diesels to petrols).

How does a 1.4 petrol Astra compare to the reliability of a 1.4 petrol Corsa? Or diesel Astra vs diesel Corsa?

6 March 2018

Why don't they just dump the Vauxhall brand and the UK factories and keep Opel?

Maybe then Vauxhall can have a good shot at a fresh start in the UK, rather than winding down domestic production so that the brand can't survive independently!

Somebody needs to wrangle Vauxhall back from PSA.

6 March 2018
Is all I have to say about that. I think they will try to do something, otherwise they wouldn't have put one of Tavares' closest allies in charge of Vauxhall and you see they are making over the advertising to promote the idea of Vauxhall being an 'authentic' British brand. However the reality is Opel/Vauxhall has lost so much money for so long, they will need to do something fairly dramatic to turn the situation around, otherwise it will pull PSA down. The UK staff will need to take this seriously, and if people want to blame someone they can blame GMs terrible management of the company. If it wasn't for PSA I suspect Vauxhall and Opel would be dead or being wound down right now.

17 November 2018

Under the trade descriptions act, selling German cars as a UK product.  Saying that, most of the half-wits out there still think Ford is British and they haven't built a car here for over twenty years and have never been a "British" brand.

17 November 2018

I wasn't aware they were "selling German cars as a UK product". When do you think this happened?

16 November 2018
TheBritsAreComing wrote:

Why don't they just dump the Vauxhall brand and the UK factories and keep Opel?

Maybe then Vauxhall can have a good shot at a fresh start in the UK, rather than winding down domestic production so that the brand can't survive independently!

Somebody needs to wrangle Vauxhall back from PSA.

It's just a rebadging exercise regardless if they close factories or not. UK built cars are sold as Vauxhall and Opel, continental Europe built cars are also sold as Vauxhall and Opel. They're also sold as Holden and they don't even have any factories in Australia anymore.

The exact same cars are marketed and advertised on TV as British in the UK market and German in the Irish market.

6 March 2018

If they closed the Uk plant after Peugeot closing coventry that the sales of  thes ecars would nosedivedue to bad publicity and lousy residuals.

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