Stellantis, owner of the Vauxhall brand in the UK, has announced it will close its vehicle manufacturing plant at Luton – where Vauxhall has been making vehicles since 1905.
The plant currently employs around 1,100 workers and makes combustion engined light commercial vehicles (LCVs). It had been due to start production of an electric version of the Vivaro commercial van in 2025.
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Stellantis acquired the Luton plant when it purchased General Motors’ European assets and the Opel/Vauxhall brands in 2021.
Stellantis said it will now consolidate its UK manufacturing footprint alongside new investment (GBP50m) ‘to enhance Ellesmere Port’s mission as the UK’s sustainable, EV-only volume manufacturing plant’.
The company also said a consultation has been launched with employees and union partners on the plan to complement existing small electric light commercial vehicles (LCV) in Ellesmere Port with battery-electric medium LCVs (K0), transferred from the Luton plant. It also said a comprehensive support plan for impacted employees in Luton, including hundreds of jobs to be relocated to the Ellesmere Port manufacturing site, will be made available with dedicated job support ‘within the very dynamic Luton area, where new third-party activities could be considered’.
Stellantis said its plan has been made ‘within the context of the UK’s ZEV Mandate’. The UK Government’s Zero Emission Vehicle (ZEV) Mandate, which targets EV share numbers and will fine OEMs for non-compliance has met strong opposition from the UK’s auto industry as EV sales have undershot expectations.
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By GlobalDataA UK Government spokesperson said: “While it’s encouraging to see Stellantis investing in the future of its Ellesmere Port plant, we know this will be a concerning time for the families of employees at Luton who may be affected.
“We have a longstanding partnership with Stellantis and we will continue to work closely with them, as well as trade unions and local partners on the next steps of their proposals.
“The government is also backing the wider industry with over £300 million to drive uptake of zero emission vehicles and £2 billion to support the transition of domestic manufacturing.”
A labour union (Unite) spokesperson described the Stellantis proposal as a ‘slap in the face’ for its Luton members. “The proposal that has been tabled today has been a complete slap in face for our members in Luton, where Vauxhall vehicles have been manufactured for 120 years. Whatever the positive benefits this plan may have for Ellesmere Port, that is not acceptable.
“We stand ready to support our members in doing whatever we can to ensure that historical vehicle manufacturing is maintained in Luton and we call on the government to do the same.”
UK ZEV Mandate concerns as BEV sales slow
Stellantis warned earlier this year that it may have to halt production in Britain unless the government does more to boost demand for electric vehicles (EV).
Carmakers in the UK are increasingly concerned that they will incur huge fines on missed EV targets under the UK Government’s Zero Emission Vehicle (ZEV) mandate.
While BEV car sales in the UK have reached almost 300,000 in the first ten months, that represents 18.1% of the market – an increase on 2023, but still significantly short of the 22% target for this year (and of the 28% which must be achieved in 2025) under the UK Government’s ZEV mandate.
Manufacturers that fail to meet the compliance levels or do not sell enough ZEVs face penalties of GBP15,000 (USD20,000) for every non-ZEV unit sold over their mandated allowance.
The SMMT – the UK auto industry’s trade association – recently held a meeting with UK ministers to discuss the issue of the Zero Emission Vehicle Mandate. The ZEV Mandate was created by the last UK Government and came into law in January 2024.
The SMMT stressed the potential negative impact of the ZEV Mandate on the UK’s attractiveness as an investment location. The industry is also coming under pressure from slowing demand for BEVs and manufacturers are having to discount BEVs in the UK in order to raise sales to avoid fines.
The Luton news comes amid a backdrop of industrial restructuring fears as BEV sales undershoot targets more generally. Ford has just announced 4,000 job cuts in Europe – including 800 for the UK.
Ellesmere Port ‘all-electric hub’
Amid the bad news for Luton, Stellantis has stressed its investment plan for its Ellesmere Port plant in northwest England.
Stellantis said that Ellesmere Port is proposed as the new all-electric UK LCV hub to take advantage of UK employees’ expertise on the new line, the site’s footprint and proximity to the Green Automotive Hub located at the adjacent Queen Elizabeth II Eastham docks and the recently constructed 59,500m² Stellantis UK parts distribution centre.
In 2021, Stellantis invested £100 million in Ellesmere Port to transform the facility to battery-electric LCV production, making it the first battery electric vehicle-dedicated plant globally for Stellantis. Ellesmere Port is currently an EV-only manufacturing facility building the company’s small LCV range of Citroën ë-Berlingo, Vauxhall Combo Electric, Opel Combo Electric, Peugeot E-Partner and Fiat Professional E-Doblo.
The company says it has transformed Ellesmere Port plant with a new body shop, upgraded general assembly, a compression of the site area and the creation of an on-site battery pack assembly. In addition, Stellantis says there is further support to enable a pathway to carbon neutrality for the plant later this decade and the plant aims to be 100% self-sufficient for electricity.
Relocation support for Luton employees
Whilst strengthening Ellesmere Port as its sustainable LCV hub in the UK with the transfer of Luton operations, Stellantis said it remains committed to acting responsibly toward its employees in Luton and, if the company proposal is approved, will offer relocation support to facilitate employees wishing to transfer to the Ellesmere Port site with an attractive package, where ‘hundreds of permanent jobs will be created’. Dedicated comprehensive job support, including opportunities for retraining, for all employees affected will also be implemented in the very active Luton area, just one mile from the international airport. At the same time, Stellantis said it will work with local government and local employers to identify new employment opportunities within the Luton area for Stellantis employees who might be impacted by this proposal if it goes ahead.
