General Motors is expected to make a decision to continue operating or shutter its Ellesmere Port factory in the U.K. by the end of the month, GM Authority has learned. The company is actively designing a plan to curb losses in Europe — which lost $700 million in 2011 — and shutting down a factory, or two, is one of the ways to sharply cut expenses. So while things may be on the up-and-up for The General overall, the outlook may not be as cheerful in England.
Ellesmere Port is located on the southern end of the Wirral peninsula. The plant currently produces the Opel and Vauxhal Astra and is GM’s last United Kingdom’s last car plant, although a plant in Luton — which makes Opel and Vauxhal Vivaro vans — is believed to be safe for now.
For the last several months, Ellesmere’s 2,800 workers have been looking forward to celebrating the plant’s 50th birthday in November. The facility churns out 47 Astras every hour and is described by GM as “one of the most productive and efficient in Europe”. It once employed 12,000 workers, but thanks to developments in manufacturing automation and flexibility, General Motors is capable of building the Astra line in other parts of its European operations, including Russelheim and Bochum (Germany) as well as Gliwice (Poland). The facility is built on the site of a WWII airfield called Hooton Park. It originally supplied components for Vauxhall’s factories in Luton and Dunstable and started to produce cars in 1963, the first of which was the HA Vauxhall Viva. It cost a mere £436 ($693) or £468 ($744) for the “Deluxe” model, and was positioned as a direct competitor to the Morris Minor and the Austin A35. About 10,000 were made a month. The plant’s later models consisted of the Chevette, Astra, and Vectra.
Earlier this month, U.K. business secretary Vince Cable made a trip to New York to hold a meeting with GM CEO Dan Akerson and Vice Chairman Steven Girsky in which he reportedly demonstrated the benefits of not only keeping, but also investing in Ellesmere and the country’s automotive manufacturing operations.
But nothing tells the story of Ellesmere Port better than the name of the local soccer (or is it football?) team, which proudly wears the Vauxhall Motors name. The Conference North league team is well known by their nickname Motormen.
Unfortunately for the Motormen, Mr. Cable, and the 2,800 Ellesmere workers, the tide seems to be set against them — as the real problem with GM’s European operations is a glut of capacity designed for unsustainably high sales levels. With most government-backed car-buying incentive over (such as the U.K.’s version of the Cash for Clunkers program), auto makers are left with a depressed market that has resulted in a 4.4 percent drop in sales last year — the lowest level since 1994. In effect, many customers who were going to buy a new vehicle pushed forward their decision to do so during the scrappage schemes and have purchased already.
At this point, it should only be a matter of weeks until the world discovers the fate of Ellesmere Port. But GM should be careful not to strip away too much capacity so as not to limit its ability to satisfy demand of a healthy market and a strong economy. In essence, the market will come back sometime in the future — and when it does, The General may have to resort to importing vehicles from China and Korea to satisfy European demand. And that may not be such a good idea.
Comments
“Last car plant”??????
What a load of Tosh as they say over there.
Nissan produces nearly 500,000 cars in England. Honda builds in England. MINI is built in England.
That’s just for starters too.
Shame on you!
Talk about hyperbole, Rocky. It’s GM’s last car plant. We’ve updated the article to avoid any possible confusion.
Don’t know if this is true, but I’m sure Alex was implying the last GM plant in the UK, not the last of all auto plants.
Ellesmere is the most efficient GM car plant in europe, where as Bochum is miles less efficient. If they shut Ellesmere it will be a stupid decision, GM execs cant be that moronicthey’d shut it over bochum. Plus wouldn’t Vauxhall sales plummit?
I understand that it’s been an accepted fact of life that Ellesmere is more efficient… but how is it more efficient — and why? Could the same efficiency be reproduced in other locations?
And why would Vauxhall sales plummet if Ellesmere were to be shut down? Is it due to the “nationalistic” factor or something else?
Vauxhall´s Ellesmere port plant has around 2,100 employees and you should mention in the article the agreement between Opel and GM that there will be no plant closure until 2014. But Jim is right there is no reason why this plant should be closed, if it got new models like the Astra and its variants. Bochum is in a bad position compared to the other plants in Europe, but Bochum is important to Opel´s image in Germany and most of Europe due to its merchandise mark “Made in Germany”.
I did not make this remark. Don’t know anything about this plant. Some other Jim.
I don´t understand GM´s policy. GM doesn´t seem to have learned from the past that you can´t make Opel healthy through plant closures and reducing the number of employees. This creates new costs and brand damage, and don´t forget that Europe is one of the toughest and most demanding markets in the world. Do GM managers have no real business plan for Opel in the next 10 years? For example by expanding the brand outside of Europe, because neither Mercedes nor BMW could work profitable, if their markets are limited to Europe. Why not exporting Opel cars to North America at a premium price under the so called luxuary Buick brand. BTW i thought the Eisenach plant is the most efficient plant in Europe.
Bochum has had so many lifelines thrown at it over the years. Absent any talk of investing in the plant for the next model closure becomes inevitable.
If Ellesmere can make its case for the next Astra it might get everything there and take over from Bochum.
A little interesting reading thanks to google: http://www.dw.de/dw/article/0,,15754288,00.html?maca=en-rss-en-all-1573-rdf
Yes, but the Germans have much more to say than the British people, while the European operations is lead by Adam Opel AG based in Rüsseslheim, Germany and thanks to Opel´s new legal form Aktiengesellschaft they become a bit more independent from GM when it comes to decisions like this. But as i said before with the right business plan no plant needs to be shut down. Even VW has dozens of plants in Germany and western Europe and they are able to handle it.
Vauxhall will get hammered if they shut ellesmere
Their new advert has english people standing throughout the country then inside and outside the ellesmere car factory then onto soccer/association football and ends with the tagline
“We’re not supporting a team We’re supporting a nation Vauxhall”
GM aren’t daft enough to end Vauxhall car manufacture in Britain as it will kill british sales, especially after such an advert.
Vauxhall has a massive 11% market share compared to opel’s 7.7% in germany.
Vauxhall/Opel sold 268,357 cars in Germany, 268,275 cars in the UK, 62,265 in Spain, 22,951 in Poland
Statistics of new car registrations in Germany for Opel in 2012: 213 ‘627 units.
Source: http://www.kba.de
KBA = KraftfahrtBundesAmt
Didn’t know there was another dave.. whoops..
Thanks for sharing, Dave! Could you point me in the direction of the source for those numbers?
Gunna call myself something else rather than dave..
http://www.opel.com/content/dam/Opel/OpelCorporate/corporate/nscwebsite/en/02_ExperienceOpel/01_CompanyInformation/01_FactsFigures/Facts_Figures-4.pdf
So the figures which you gave before cover the year 2011.
BTW, the table is on page 39 of that 2011 annual report.
According to this report, Ellesmere Port is going to survive. The Zafira will be built in a Peugeot Factory, and the second Astra factory will be in Poland. Bochun will die. Source Der Spiegel via Autocar
http://www.autocar.co.uk/News/NewsArticle/AllCars/262774/
The press item which you link to is one year old.
But helpful in reminding that a year ago, GM decided to concentrate the production of the Astra in Gliwice and Ellsmere Port, moving it out of Rüsselsheim. Back then one reason was that the workers at Ellesmere Port gave in to the bosses’ demands to cede rights which had been won by hard battles. And now they get the reward by threats to close the Ellesmere Port plant, too. Give backs dont pay out, an old experience of the workers movement.
Oops, now I have to admit that I did not notice the date of the original post, which was a year ago.
I just wonder why it appeared at the top of the screen when I opened the GMauthority.com/blog website?
Too strange…