General Motors has decided to close its Vauxhall car plant in Luton, Bedfordshire, with the loss of about 2,500 jobs, the BBC reports.

The plant, which makes the medium-sized Vectra for both UK consumption and export, had been thought to be one of the most secure in the UK.

It is currently the sole European source plant for the estate (station wagon) variant. The factory has been in operation since the early 1900s, opening in what was then open country when Vauxhall moved from south London.

The expected announcement will come only seven months after Vauxhall announced that about £32m would be invested in Luton to boost efficiency and productivity at the Vectra plant.

This was to be part of a total £189 million investment in Vauxhall's three UK plants to boost production by 55,000 vehicles and create 500 jobs in the expanded IBC van plant to build a new range developed jointly with Renault.

It now appears that, instead, about 500 of the Vectra plant workers will be be transferred to the van factory which is not affected. Vauxhall will retain its Ellesmere Plant factory near Liverpool which makes the Astra and V6 engines.

BBC News says it has learned that General Motors in Detroit has decided to close the car plant as it reorganises its worldwide operation.

Vauxhall sources told that an official announcement will be made at 16.00GMT today (12/12/00). That is the same time that General Motors officials in Detroit are expected to announce a major reorganisation incorporating the possible demise of the Oldsmobile brand.

The BBC says that Vauxhall's problem is that the demand for the Vectra, which is made at the British plant, is low and GM has decided to concentrate production of the Vectra's replacement in continental Europe, primarily in Germany but also in Holland.

UK government ministers are said to be prepared for political fall-out -- although Vauxhall is not believed to see the high value of the pound against the euro as a factor in the decision.

Ford has already decided to stop making cars at Dagenham in Essex.

The BBC understands that Ford's decision prompted General Motors executives to look more closely at a British plant closure.

Auto market intelligence
from just-auto

• Auto component fitment forecasts
• OEM & tier 1 profiles & factory finder
• Analysis of 30+ auto technologies & more