Vauxhall will be left on the edge of its seat as its new owner, France’s PSA Groupe, decides whether to keep the brand’s Ellesmere Port assembly plant open past the year 2021. PSA will decide the factory’s fate by the end of 2017, according to The Financial Times.
The Ellesmere Port facility has built the Vauxhall Astra since 1981 and accounts for 120,000 cars produced a year in Britain. Since the United Kingdom’s shock vote to exit the European Union, the plant’s future has been widely debated. Analysts fear the plant will not be competitive should tariffs and other trade restrictions be imposed on the country or EU’s trade block.
The next-generation Astra is expected to enter production in 2021 and will ride on a PSA architecture to save costs. All future Opels will feature PSA architecture and technology as current GM-based models ride out their life cycles. When it comes time to build the new Astra, the Britain may not be the most attractive location for PSA.
Much of Britain’s production attractiveness stems from its access to Europe, something that will quickly go away in the future. Three-fourths of the parts used to build the Vauxhall Astra are sourced from the European mainland.
The Astra is also produced with an Opel badge in Gliwice, Poland, while the similarly-sized Peugeot 308 is built in Mulhouse and Sochaux, France. The Sochaux facility, in particular, is said to have the capacity to add future Astra production, which would carry out PSA’s goals for streamlined and cost-savvy production.
The UK government previously assured Nissan in writing that it would not be subject to any future negative trade conditions should it choose to invest in the country’s Sunderland production facility. Nissan committed to producing two new crossovers at its facility in return.
It’s unclear if Vauxhall may receive a similar guarantee, but even if it does, Ellesmere Port may not be long for this world if PSA has its way.
Comments
Both german and britain unions believed that if Opel/Vauxhall wouldn’t be no more under the GM’s umbrella, everything would be fine! But their problems begin right now: PSA has a long tradition of dropping some brands (like Simca/Talbot) or cutting jobs when it required. Futhermore, in the scale economies goal, Opel/Vauxhall will have to share the PSA platform and I wonder which customers will want to buy a “more expensive Peugeot” against a Volkswagen? They would have stayed in GM, It always is the bad results of a merger!
GM also has a long tradition of dropping brands and closing factories. Check out
en.wikipedia.org/wiki/List_of_General_Motors_factories#Closed_or_sold_factories
IN Europe:
2006 Opel plant in Azambuja, Portugal
2010 Saab factory in Trollhättan, Sweden
2011 Opel factory in Antwerp, Belgium
2014 Opel plant in Bochum, Germany
As result of the GM bankruptcy, a number of plants had been closed in North America, and several brands dropped.
I haven’t said that GM wouldn’t have cut jobs or close factories but that the unions thought PSA would improve the business without these drawbacks: Yet, the unions haven’t give this “degree of freedom” to GM like they are going to have to make it for PSA.
I for my part did not notice of the workers, i.e. our unions, giving more trust to one or the other owner.
They just insisted that the new owner should underwrite the same committments as the outgoing one.
If the Astra continues to have three-quarters of its content from Europe, it should get a favorably reduced tariff when imported back to Europe unless these countries become very vindictive.
The other factor is that Vauxhall enjoys far better market penetration in the UK than it does in Germany and many other European countries. The UK popularity will diminish considerably if there is no local production.
Additionally the fallout from Brexit will not be known by the end of the year, so I predict that no firm commitment will emerge by year-end.
The maximum per vehicle sales allowed under EU laws without a specific trade agreement is 100 per year. Enjoy !
Brexit is congruous with isolationism. While the rest of the world are stitching together FTAs, Britain has gone in the opposite direction. Only time will tell. The decision at the end of this year by PSA will be a drafting gate for the Brexit strategy going forward.
Why we still getting opel and Vauxhall news on a GM news website?
As long as calling the URL media.gm.com from my PC here in Germany redirects automatically to media.gm.com/media/de/de/opel/home.html displaying the “Opel Pressroom” with news dated today, August 30, 2017…
Besides, Opel is producing Buick Regal and Holden ZE Commodore for GM companies for undetermined time, and imports cars like the Opel Karl (Vauxhall Viva) and possibly the Mokka from GM Korea.
And Opel has a free licence to produce the current lineup of cars with patented GM technology until the end of the lifespan of those car models (but coupled with the restriction of the sales are to those country where Opel cars are being sold today).
So, the umbilical cord has not yet been cut. Only the ownership of the Opel/Vauxhall automobile business in Europe has been passed from GM to PSA, with the responsibility for all upcoming business decisions and their consequences.
Phrases in the article like “Three-fourths of the parts used to build the Vauxhall Astra are sourced from the European mainland” and “Astra is also produced with an Opel badge in Gliwice, Poland” make me think that there is a misunderstanding, as if Vauxhall branded cars are all produced in the Ellsmere Port factory, and Opel branded ones on the continent. That would be wrong.
Actually all Opel/Vauxhall plants produce both Opel and Vauxhall branded cars (and Opels in both left hand steering and right hand steering). The distribution is according to the model being produced; so all Astra station wagons are produced in Ellsemere Port plus a part of the other Astra body variants, while the Gliwice factory in Poland produces most other Astras. The Rüsselsheim factory has also produced some Astras (on the same line as the Insignia), until with the closure of the Bochum factory the production of the Zafira was moved to Rüsselsheim.
GM used to say build it where it sells, well on that basis all the Vauxhall range would be built here. Unfortunately in this day & age that’s not possible or that’s what we are told, even so we deserve a fair deal. One solution would be to build Zafira alongside Astra at Ellsmere Port, yet will Zafira last beyond 2020.
They are being built where they sell, those cars: in Europa, except the Karl/Viva, and I don’t know how much of Mokka.
Observer7 Mokka started production in Korea, then it was Korea & Spain. Now it’s just Spain.
No. Is still Spain and Korea. Zaragoza Opel plant capacity can not cover complete European demand ..
Brexit is the death knell of car manufacturing as the Xenophobes of Little England draw up the bridge and turn ourselves away from the world and the richest free market anywhere. Only staying in the customs union and single market can Ellsmere Port and other car manufacturing plants be saved. This are the harsh realities of the ridiculous Brexit decision.
Don’t forget the European market also contains the P.I.G.S. (Portugal, Italy, Greece and Spain) which are known to be the some of the most volatile & poorly run economies in the ESM. Didn’t Germany just bail out Greece last year? Your “richest free market” is realistically the cornerstone markets of Germany and France, plus the UK.
Vauxhall’s factories shouldn’t be up for debate both Ellsmere Port & Luton are omongst the most productive & high standard there is. Why isn’t there a debate as to wether Adam, Insignia or Zafira (to name a few) could be built alongside Astra & Vivaro here, after all Vauxhall has made profits as well as decent sales of every model not just here but when compared to other countries efforts too.
In pre-industrial times, every town had one or more wagon and coach builder.
If you want to go back to that time…
The english chauvinist isolationism which got its expression in the slight majority for the “leave” vote in that non-binding referendum, if pushed to its extremes as fools like David Davies or irresponsible agitators like Boris Johnson seem to want, that may result in the end of any kind of automobile industry on the island. It would become too expensive and cumbersome.
Obviously England wouldn’t go back to whatever era brexters thought it would, that’s gone & only a fool would think it would return.
They will be because of Brexit – Brexit will likely see the end to just in time deliveries and tariffs which will make them uncompetitive overnight. Add in weak trade unions and a government who are only interested in the wealthy and boom!
Those that voted leave & proudly showed off their stickers in their rear windows ALL ironically drove imports. I’ve said before England is better off IN. GM has obviously made their decision based on this. Fact is non of these decisions can be changed, we have what we have & must deal with it, we must also fight for everything we have & also aim to better our position
It makes me happy to know that opel and Vauxhall will never be under the GM brand ever again
People should stop demonizing PSA. First off, not PSA will decide the fate of Ellesmere Port, but Opel in Rüsselsheim. If GM Authority would read or translate German articles from time to time, they would know that various PSA managers stated that PSA’s corporate structure wouldn’t be heavily affected by the acquisition of Opel/Vauxhall, because that part (PSA) is profitable, and they described this “partnership” as “Team PSA” and “Team Opel”, so they’re not interested in fully incorporating Opel/Vauxhall into their structure for now that’s why they said they want to keep Opel as much German as they can. But this will probably depend on how well Opel will perform in the next few years. Though the massage from Paris to Rüsselsheim is clear:”Get profitable! How? That’s your job to figure out in the next 100 days.” Opel have to cut as many jobs, close factories and find synergies it can to achieve this goal.
I disagree. It will be PSA who decides abou plant closures.
The PSA management has assigned the Opel management to work out a plan how to make Opel Automobile profitable, and has given 100 days. Why this deadline, if Opel has to do everything by itself?
The deadline is when Opel is to present to their owner how they intend to proceed, and PSA will give its OK or not.
Mind you, there are also 2 representatives of PSA on the Opel Vorstand (probably “Board of directors” in US terms).
So, the Opel management will have to bear the responsability vis à vis the workers who have to bear the brunt of the cuts, but the final decision making will be in the shadows of 75, rue de la Grande Armée in Paris.
The only hope for Opel and its plants would be the export. If PSA manage to developp the brand on the global stage, maybe, there would be less job losses and plants closure. I hope too that GM will open a new european research and development center: They would avoid to disconnect of the european (Consequently, of global) market.
Well something will have to give,we know.Ellesmere port are having minimum one week off every month with full pay.The amount of hours owed is too great to pay back,so in effect it is free time off.Ellesmere port produces very few what we know as astras,it produces the sports tourer.The tourer is a new vehicle but sales are plummeting,by the end of the year volume will be below 80k vehicles (This is one shift territory).The plant has escaped closure a few times but since then no investment has been put into it.So the plant needs a massive investment.Will psa invest a large amount of money when it soon wants to break even,then a short period of time 6% profit.I know a lot of money is wasted at the plant with TUPE agreements for contract firms making cleaners etc the best paid in the UK.Also the plant is very top heavy management wise,I have lost count how many executives.Changes or closure is upon us……..Make them an offer they can not refuse.Must say some managers & executives have come through the ranks,been at Vauxhall for years,but still don’t know how to manage.Some believe it or not have difficulty in basic reading & writing.A cull is needed or a true psa takeover & get shut of the dead wood,which will amount to a large pile.
@Dave Essex: does the Ellsmere plant really work in only one shift? Or do you mean that it would drop to one shift operation if the sales plummet?
You write that the plant “produces very few what we know as astras,it produces the sports tourer.” — does that mean only the station wagon, i.e. the so called “Sports Tourer”?
Or is another body variant also produced? The 3 door hatch, maybe?
On Daves comment we work 2 shift but on very low volume.When volume is low the track speed is lowered.It could go as low as 25 cars/hr so upping speed & working one shift is an option.As for vehicle build it is the sports tourer we build (96%) with the occasional 5 door astra thrown in.The bulk of 5 door astra is built in Poland.No 3 door produced at ellesmere port.Hope that answers your question,its basically a sports tourer plant of which sales are rapidly plummeting as to say.Very worrying.
@Julian: thanks a lot for this information. This is very helpful.
Ellesmere Port is the only plant producing the “Sports Tourer”. All other Astra is produced in Gliwice (German: Gleiwitz) in Poland.
Going from 2 shifts to only 1 means also layoffs, and it puts the existence of the factory in jeoparty, since the capitalist want their machines to turn as much hours per week as possible, best 24 hours per day 7 days per week.
Both Luton & Ellsmere Port will be fine, Luton produce Vivaro van & it’s various versions (in fact the luxary minibus/MPV versions, will probably go so far upmarket a separate name might be needed than the Vivaro van versions). Ellsmere Port have always produced the Astra & it’s a strong seller that’s been in the range through generations, a bread & butter model, a iconic car that’s loved by many Brits. Apparently 1 in 4 have ether owned or driven a Astra. We have 1 in our household. Long may Astra production stay here in Ellsmere Port, infect what Ellsmere Port needs is another model to produce alongside the Astra.
PSA produce numerous better vans than the Vivaro and the Astra is made much more cost effectively in Poland. Vauxhall is toast.
Music to my ears! I love it!
Don’t worry the ellesmere port convenor will save us……..what a thought……..God help us.But in defence all the feedback is helpful……ha ha ha
Poland produce what we know as 5 door astra,Gliwice in Poland rank higher in all productivity & direct run.Do Peugeot produce an estate/sports tourer type vehicle like that is produced at ellesmere port?Main thing is make a decision on future,is this what this 100 day plan of action is all about.100k a man like it would cost in Germany.IM just looking forward to the bonus for not going on 3 shift (the convenor got a great deal)
Yes, PSA does. One example is the 308 SW, but similar to the Astra and Insignia combi variants, those have lost lot of their usability to transport goods or tools. Those functions have been replaced by utilities like the Opel/Vauxhall Combo/Fiat Doblò, Renault Kangoo/Mercedes Citan, Citroën Berlingo/Peugeot Expert, VW Caddy etc.
Observer7, not in the market for a estate but if I was I’d take a Astra estate (tourer) over any of the van based models you’ve mentioned above
Never been a fan of SUVs & MPV’s, fact is they date faster than classic shaped cars also. Also a fact is unfortunately people disagree with me & like them, this means that they sell which I guess is what’s intended. With this in mind people have not just one choice (Astra) but two or three (Astra, Mokka x, Zafira) which will inevitably take some sales off of Astra. A second model produced alongside Astra here would make sense.