PSA to close Ellesmere Port plant if Brexit hits profitability

PSA has threatened to pull production at Vauxhall’s Ellesmere Port plant and move it to mainland Europe if Brexit causes a downturn in profitability, according to reports.

Speaking to the Financial Times, the Group’s chairman Carlos Tavares says it has “an alternative to Ellesmere Port”, said to be located in Southern Europe. 

“Frankly I would prefer to put it [the Vauxhall Astra] in Ellesmere Port but if the conditions are bad and I cannot make it profitable then I have to protect the rest of the company and I will not do it,” Tavares told the FT. 

The remarks are the strongest made so far by Tavares, who said last week that a no-deal Brexit “cannot be considered” and would have significant impact on the car making group. In June, PSA announced it would ready the Ellesmere Port plant, near Liverpool, for the next-generation Astra to be built in 2021. However, that commitment depended on the final terms of Britain’s exit from the European Union.

A proposed move to Europe would almost certainly lead to the closure of Ellesmere Port, which employs more than 1000 people and has been established since 1962. The Astra has been produced there since 1981.

New Prime Minister Boris Johnson has take a hardline stance on the UK’s exit from the EU, slated for 31 October whether a deal is struck or not. If there is no deal, it would trigger both increased customs checks and tariffs for importers. “For us it’s quite simple – we need visibility on custom; that’s all,” Tavares said. 

Ellesmere Port is the most vulnerable of the UK’s car making facilities from a trade issue perspective - 80% of production there is exported to mainland Europe and about 75% of the components to build the cars are imported from there. 

Read more:

PSA chairman Carlos Tavares on the group's next steps

Vauxhall set to build next generation Astra at Ellesmere Port

Analysis: Brexit and the UK car industry