General Motors Europe’s Opel /Vauxhall unit on Thursday (17 May) assured the future of its Ellesmere Port plant in northwest England with the announcement that it would be the lead plant of only two in Europe building the next generation Astra (internally coded T3600).
The Opel plant in Bochum, Germany, is likely to be closed after existing labour agreements run out in 2014.
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GM said the decision followed the conclusion of a “ground-breaking new labour agreement which was approved by the Vauxhall workforce yesterday”. The agreement comes into force in 2013 and runs through the life of the next Astra, into the early 2020s.
Britain’s Unite union told Reuters 94% of those balloted voted in favour of changes to working conditions.
“It’s almost certain that one of GM’s German plants will now be closed, probably the plant in Bochum,” a source close to the negotiations told the news agency which noted production of the Astra, the most important model in Europe, at Opel’s main plant in Russelsheim, Germany, would stop, leaving the car made only at Ellesmere Port and at Poland’s Gliwice plant from 2015.
The source added that some production of GM’s Chevrolet brand could be shifted from Asia to Europe, with Russelsheim the likely beneficiary. This would leave Bochum as the most likely site to be closed.
As part of the agreement, Ellesmere Port would implement “a number of creative operating solutions to improve flexibility and reduce fixed costs and hence significantly improve its competitiveness” and would then be one of the most competitive plants in the Vauxhall/Opel manufacturing network, GME said.
Assembly of the new Astra line is scheduled to start in 2015. Operating on three shifts, the plant is expected to run profitably at full capacity utilisation. The plan agreed a minimum of 160,000 vehicles to be produced each year.
Reuters’ source said this was a rise from the current 140,000 cars a year and there was potential to hit around 220,000.
Workers agreed a four-year pay deal, including a pay freeze for two years, followed by rises of around 3% for the next two years, the source added.
Vauxhall/Opel plans to spend GBP125m at Ellesmere Port to upgrade it to the latest manufacturing standards and prepare for production of the new model. The company expects to create around 700 new direct jobs for three shift operation.
The automaker will also raise local content to at least 25% which will create further employment locally and in the UK overall and further increase the plant’s competitiveness.
Vauxhall chairman and managing director, Duncan Aldred, said: “We have been able to develop a responsible labour agreement that secures the plant’s future.
“With Ellesmere Port’s proven build quality and a new agreement that ensures excellent cost competitiveness, this facility will provide additional employment and, as the lead plant for the next-generation Astra, will be one of the cornerstones of our European manufacturing footprint.”
“Once again we have seen the success of the UK automotive industry and the crucial role it plays in growing and rebalancing our economy,” British prime minister David Cameron said in a statement.
“This has been a real team effort with the Government, the company, unions and workers all focused on keeping production in the UK.”
Britain now exports more cars than it imports for the first time since 1976, official data released on Wednesday showed.
Ellesmere Port was opened in 1964 to build the HA Viva. It was one of a number of auto factories built in areas of high unemployment in England and Scotland during the 1960s. Most have since closed apart from Ford’s Halewood plant nearby which is now a Land Rover factory.
Bochum was also opened in the mid-1960s.
