Vauxhall warns Ellesmere Port plant could close under no-deal Brexit

Vauxhall warns Ellesmere Port plant could close under no-deal Brexit
Vauxhall warns Ellesmere Port plant could close under no-deal Brexit

Vauxhall’s parent company has warned that the car maker’s Ellesmere Port plant could be shut down if Brexit leaves it unprofitable.

The PSA group’s chief executive, Carlos Tavares, told the Financial Times he wanted to see the new Astra built in the UK but had an alternative location in Europe identified if a no-deal Brexit or an unfavourable Brexit deal left Ellesmere Port losing money.

Moving production of the new Astra from the UK would most likely lead to the closure of the plant in Cheshire and put 1,000 jobs at risk. The firm’s Luton van factory would be unaffected.

Alternative location

Mr Tavares said: “I would prefer to put it [the Astra] in Ellesmere Port but if the conditions are bad and I cannot make it profitable then I have to protect the rest of the company and I will not do it.

“We have an alternative to Ellesmere Port.”

His comments come after Prime Minister Boris Johnson revealed he was stepping up preparations for a no-deal exit from the EU.

In June PSA, which also owns Citroen, Peugeot and DS, said it intended to build the next-generation Astra at Russelsheim, in Germany, and Ellesmere Port from 2021 but that the decision would depend on the final Brexit agreement and how it affected imports and exports.

Eighty per cent of vehicles currently produced in Cheshire are exported to Europe and around 75 per cent of its components are imported.

80 per cent of cars built at Ellesmere Port are exported to Europe. (Picture: Paul Ellis/AFP/Getty Images)

Mr Tavares told the FT: “For us it’s quite simple; we need visibility on customs, that’s all. We need visibility on customs for parts coming from continental Europe or from the rest of the world, and we need visibility on the customs for cars coming out of the UK to continental Europe.”

Existential threat

Mr Tavares’ comments come as the trade body for the car industry warned the Prime Minister that a no-deal Brexit was “simply not an option” if the UK industry was to survive.

In a letter to Mr Johnson, Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, warned: “A no-deal Brexit presents an existential threat to our industry.

“We are highly integrated with Europe, and a no-deal Brexit would result in huge tariff costs and disruption that would threaten production, as well as further undermining international investors’ confidence in the UK. We need a deal with the EU that secures frictionless and tariff free trade.”

Honda announced in February it will close its Swindon factory by 2021, putting 3,500 jobs at risk. (Picture: Adrian Dennis/AFP/Getty Images)

The latest comments are the latest in a series of blows to the UK car industry.

In February Nissan announced that it would not build the new version of its X-Trail SUV at its Sunderland plant and Honda revealed that it planned to close its Swindon factory in 2021. In June Ford said it would close its Bridgend engine plant.

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