Vauxhall’s Ellesmere Port manufacturing plant is to cut some 400 jobs as it looks to improve its competitive position amid changes to demand in the European car market.
A Vauxhall spokesman told just-auto that the Ellesmere Port plant needs to ‘rightsize’ and adjust production volumes to reflect changes in demand in the European market, particularly the rise in demand for SUVs and decline of the more conventional passenger car segment represented by the Astra.
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The plan is to take a shift out at Ellesmere Port (so that it moves from two-shift production to one) during 2018 to improve its competitive position and boost its financial performance. It is hoped that the employment reduction will be achieved through voluntary redundancies.
Vauxhall says it will consult with employee representatives and will look for potential opportunities to minimise the impact of these proposed headcount reductions. This consultation will take place over a 45 day period in line with legal requirements.
Brexit uncertainties are not a part of the decision to adjust output levels at the plant, the spokesman told just-auto. “Once there is 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,” the spokesman said.
The Ellesmere plant – formerly part of GM’s European Opel/Vauxhall manufacturing structure but now part of PSA Groupe – is currently Opel-Vauxhall’s lead plant for the Astra model and directly employs around 1,800 people at the site in northwest England. It is built as a five-door hatchback and an estate/wagon (‘sports tourer’ – sole source) at the plant. Moving from two shifts to one implies an output reduction from around 140,000 units a year to around 90,000.
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By GlobalDataThe Astra model is also made at the Gliwice plant in Poland – which also serves as sole source for four-door model.
PSA has yet to decide whether Ellesmere Port will continue to be the lead plant for the Astra model and has also embarked on a review of the Opel-Vauxhall European manufacturing network following its purchase of the operations earlier this year. The comprehensive review is expected to have been completed by November.
Analyst Ian Henry also told just-auto that the move reflects European market movements rather than Brexit concerns. “The reduction in Ellesmere Port manning – and therefore production numbers – is really down to market shifts, with fewer people buying C segment hatches and estates,” he said. “Ellesmere Port and Opel Gliwice have seen Astra volumes dive as consumers switch to SUVs and crossovers.
“I really don’t think PSA has made a definite decision yet on what it will do with Ellesmere Port (or indeed the van plant at Luton) when the current models come to the natural end of their life cycles in 2022-23.”
He also says the size of the UK market means that, whatever Brexit deal is done, a case could be made for local production. “However, future production would highly likely be in different segments to those currently made in Ellesemere Port,” he adds.
In an interview with just-auto at the Frankfurt Motor Show, PSA chief Carlos Tavares warned of productivity gaps across the Opel manufacturing network that will require work to bring plants into line with PSA efficiency levels. He also said that uncertainty over Brexit was hampering decision making for the company in terms of longer term investment plans.
See also: FRANKFURT – PSA’s Tavares sees need to raise Opel efficiency
