Vauxhall's Ellesmere Port plant needs to close the cost and quality gap between it and its European equivalents if it's to survive, according to PSA Group CEO Carlos Tavares
Vauxhall’s Ellesmere Port plant must close the cost and quality gap between it and its European equivalents if it's to survive, PSA Group CEO Carlos Tavares has reiterated.
Speaking at the 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 address.
“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 efficiency plants the firm operated. However, insiders say that benchmarking it against existing PSA plants has highlighted deficiencies.
“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.”