Today’s news that the future of Vauxhall’s Luton facility has been secured for what will likely amount to a decade is great news for UK manufacturing.
It’s testament to the strength of the Vivaro van as a brand; production at the plant increased last year despite overall UK vehicle production falling.
Carlos Tavares, the boss of Vauxhall parent PSA Group, said the decision has been made now because there is urgent demand for more capacity for the Vivaro and, importantly, its future PSA sibling vans, the Peugeot Expert and Citroën Dispatch. Both of those models will now also be built in Luton.
The decision shows faith in Luton but – and this is an important but – also puts management to the ultimate test. They have a decade to reach the transparent benchmarks that Tavares sets across his brands.
While announcing the Luton deal, Tavares noted the factory had managed to reduce manufacturing costs by 17% last year over 2016, but he was clear that there was still another 20% to go for Luton to be on a par with continental European plants. That’s a massive chunk of cost to cut out of a manufacturing facility.
Tavares said today that he would be working “intensely” with the Luton team to ensure it was on track.
The early success of this new period for Luton – and how it is managed by UK bosses – will no doubt contribute to a decision on the future of the Ellesmere Port factory. PSA is set to rule on that in 2020 and Tavares has said the plant is working hard to meet the efficiencies needed to be viable.
While there are still decisions to come, and work to do, this is still a great news day for Vauxhall, PSA and the unstable British economy – not to mention the workers at Luton. Now it is time for Vauxhall to prove that the faith and investment put into it are well judged.