Vauxhall factory to close on Friday for a month

Dec 8 2008 by David Bartlett, Chester Chronicle

THE Vauxhall plant at Ellesmere Port will close on Friday for a month as the crisis engulfing the world’s car market continues to bite locally.

It was revealed this weekend that Vauxhall, which employs 2,200 at its Wirral factory, had been involved in talks with the Government last week, but the company denied it had asked for financial guarantees.

Last night, US lawmakers were getting closer to a deal to provide $15bn (£10.1bn) in emergency loans to help General Motors, Vauxhall’s parent company, and Chrysler avoid bankruptcy.

It came as an influential US senator said GM chief executive Rick Wagoner should resign to allow new leadership to restructure the faltering company.

Vauxhall said the negotiations taking place in America were “highly relevant to the strategic direction of the GM global business and specifically for Vauxhall in the UK”.

Union leaders in Merseyside last night said Vauxhall’s management should be asking the Government for assurances if GM did go under.

John Fetherstone, union convenor for Unite, said both Vauxhall and the British Government needed to follow Germany’s example and start planning for if the worst happened with GM.

German Chancellor Angela Merkel said last month her government was ready to guarantee funds for Opel, another subsidiary of GM.

The German government is currently working on a number of options, and is expected to make an announcement before Christmas.

Business Secretary Lord Mandelson said there will be no “blank cheque” to rescue troubled companies.

It comes despite Jaguar Land Rover, which employs more than 2,000 people at Halewood, asking for a £1bn rescue package.

Lord Mandelson said: “It is known that firms in the automotive sector have had discussions with us.

“We have made it clear they need to look to alternative sources of lending before they can expect a response from the Government.”

But he has left the door open by saying that, faced with “potentially the worst economic situation for generations”, there may be cases that justify the exception to the rule.

The Ellesmere Port plant usually closes on Christmas Eve for the seasonal stoppage, but this year is starting the break 12 days earlier, due to a dramatic drop in car sales.

On Friday staff will leave the plant and not return until January 12 – a month later. The plant was forced to cease production for 18 days in October and the beginning of last month.

Car sales in the UK have fallen by 37% when compared with the same time last year.

The company cut 900 jobs at the Ellesmere Port site in May, 2006, when it ended the third shift at the car factory.

Last night, Mr Fetherstone said: “Without a shadow of a doubt, GM is in a mess and have had to go the American government with a begging bowl. Vauxhall is not a lame duck, but they should be making a provision for just in case.”

The unions are set to meet Vauxhall’s managing director, Bill Parfitt, the week after next, when he will be pressed for answers on what the company has done to mitigate future problems.

“We are going to be asking the question of whether he is asking the Government [for support].”

He said he could not say for definite what the immediate impact of the collapse of GM would be on Vauxhall.

“I don’t think we have had a lot of help from the parent company in recent years.

“I would like to think Vauxhall itself should survive.”

The plant is due to start production of the new Astra next September.