Optimism may be emerging for the future of the Vauxhall plant in Ellesmere Port.
French auto giant PSA, which manufactures Peugeots and Citroens and which now owns Vauxhall and Opel, announced last month that 400 jobs would be lost from the plant’s 1,800 strong workforce due to falling sales.
The company said the redundancies had come about because the group is ‘facing challenging European market conditions’.
Workers would also move from two production shifts to one in early 2018.
Ellesmere Port and Neston MP Justin Madders (Lab) said at the time: “This is hugely disappointing news; for so many people to lose their jobs at once is bound to have an impact on the local economy.
“I hope that the vast majority, if not all, of the departures can be achieved on a voluntary basis and that the local job centre will be proactive in working with those dismissed to find further opportunities.
“It looks like this decision is down to the slow sales figures for the Astra in recent times, rather than a reflection of the dedicated local workforce, but equally we cannot pretend that there isn’t still huge uncertainty about the future.”
But recently Mike Hawes, the chief executive of industry body the Society of Motor Manufacturers and Traders (SMMT), is reported to have been hopeful a ‘stay of execution’ for the plant could be obtained despite the job loss announcement.
Mr Hawes, who represents the automotive industry in the UK and lobbies the Government on its behalf, accepts there are ‘clearly uncertainties’ around Ellesmere Port, but is ‘hopeful’ for the future it is believed.
His view that the takeover of Vauxhall and Opel by PSA brings a degree of uncertainty ‘but Ellesmere Port is a strong location with a good, productive workforce’ has been widely circulated.
Mr Hawes is understood to refer to previous comments by PSA chief executive Carlos Tavares that he had never closed a car plant, adding: “Anyone in his position will want to review the facts and he’s gone on record saying he has never closed a plant so I am hopeful.
“Yes, the fact they have cut the workforce is a concern. Hopefully that can be achieved by voluntary redundancies and is seen more as a reflection on demand in the UK and (continental) Europe rather than fundamental long-term change.”
PSA has said it has ‘affirmed its commitment to the Astra plant at Ellesmere Port’ and ‘has every confidence in the capability and skills of the Ellesmere Port workforce to deliver the necessary improvements in financial performance’.
It adds: “Once it has enough visibility on the future trading relationship with the EU and the plant competitiveness has been addressed the company will be in a position to consider future investments.”
In an interview in Berlin, Automotive News Europe reports Mr Tavares as saying he believes there is value in developing the Vauxhall marque, which began manufacturing cars in 1903, around its long heritage to reconnect with British consumers.
“I consider Vauxhall as an asset and not a penalty,” Mr Tavares is understood to have said. “I don’t see there’s a risk that Vauxhall doesn’t stay.”
Back in March, Mr Tavares allayed fears over factory closures and suggested that having a British plant in the context of Brexit ‘may prove to be an advantage’.
Mr Madders suggests: “The hope for Ellesmere Port must be, in trying to be positive for the company, it’s about getting costs down at this point so they can then compete for models coming up in future, in particular the replacement model for the Astra.”
This has to include a model that has a range of different bodies including sports utility vehicles in order to appeal to the way the market is going.
Vauxhall itself is well aware buyers are increasingly looking for SUVs and moving away from the type of five-door estates and hatchbacks made at Ellesmere Port.
The Astra is the seventh best selling car during the year in the latest SMMT figures but dropped out of the top 10 for October as the industry took a double digit decline.
Meanwhile in a new announcement Opel/Vauxhall reveals it is looking to a return to profitabilty by 2020.
It insists its plan is designed with the ‘clear intention to maintain all plants and refrain from forced redundancies in Europe’.
“The necessary and sustainable reduction of labour costs shall be reached with thoughtful measures such as innovative working time concepts, voluntary programs or early retirement schemes,” it says.
Chief executive Michael Lohscheller, who was given 100 days by the new owners to produce proposals to drive Opel/Vauxhall out of the red, says the intention is to enhance competitiveness and growth including reducing costs by 700 Euros a car and unleashing Opel/Vauxhall performance to pave the way to a sustainable future.
All the proposed measures are said to contribute to a lower financial break-even point for Opel/Vauxhall of 800,000 vehicles, creating a profitable business approach whatever the possible difficulties may be.
By 2024, all European passenger cars will be electric offering a pure battery electric propulsion or a plug-in hybrid version alongside efficient traditional engines.
“This plan is paramount for the company to protect our employees against headwinds and turn Opel/Vauxhall into a sustainable, profitable, electrified, and global company,” according to Mr Lohscheller.