Vauxhall must sell more cars to save factory

Says new boss appointed by French owners Peugeot

THE future of Vauxhall’s Ellesmere Port factory hangs on whether the company can improve sales, its incoming boss has warned.

Stephen Norman has been parachuted in by Vauxhall’s new French owners PSA, which also own Peugeot and Citroen, to take charge of the brand in Britain amid a slump in demand.

There are fears for the future of Ellesmere Port, in Cheshire, as the Vauxhall Astra it makes is due to end its run in 2021, and after that it will compete with other PSA plants in Europe to make the next model.

A third of the 1,900-strong workforce is being axed to cut costs and make the plant more competitive with its European cousins. Vauxhall says manufacturing costs at Ellesmere Port are double that of PSA’s best-performing plant in Sochaux, France.

Norman, 63, said: ‘If we manage to make a radical improvement in... the UK and my future colleagues in Opel across the continent do the same in their markets, particularly in Germany, then there will be a requirement not only for every possible unit of production that we’ve got but maybe even more besides.’

He declined to say how much demand needs to increase to secure the future of Ellesmere.

But he added: ‘The two issues are related from the demand side… so if you create enough demand for the Vauxhall in Great Britain and Opel in continental Europe, there will obviously need to be a production from Opel Vauxhall factories, including Ellesmere Port.’ Demand for the Astra (pictured) has slumped as consumers favour chunkier SUVs instead of the five-door family car.

But it was still the sixth most popular car in the UK last year, with 34,000 registered between January and July. Vauxhall’s sales in Britain fell 22pc in 2017, compared to a market decline of 5.7pc, as it sold 195,137 cars.

Norman declined to comment on what was said between Britain’s business secretary Greg Clark and PSA boss Carlos Tavares at a meeting in Paris on Wednesday, when it is believed Ellesmere Port was discussed.

Norman takes full control next month, replacing Rory Harvey.

PSA is planning to make around £1.5bn savings and has pledged to keep production of the Astra based at Ellesmere Port until 2021 but has made no guarantees beyond then.

Asked last March whether the savings could be made without job cuts, Tavares, 59, said: ‘As they are built today [the savings] are not based on job cuts, because that is consistent with what I have been trying to communicate, which is we give people a chance because people are good – they are talented, they are educated, they are creative.

‘And what we are going to offer them is a European benchmark against which they can compare themselves in every different function of the company.’

Unite union boss Len McCluskey is due to meet Tavares today, and has pledged to warn him that closing Ellesmere would seriously harm UK sales.