PSA drives Vauxhall to first profit in 20 years

THE struggling Vauxhall-opel marque has undergone a remarkable turnaround under new owner Peugeot PSA that removes the fear of more job cuts in the immediate future and could result in the business becoming a “hero” for the France-based carmaker.

Reporting half-year results, Peugeot revealed Vauxhall-opel is on track to make its first annual profit in 20 years after being bought by the European car company last year.

The sister brands – the same cars but badged as Vauxhall in the UK and Opel elsewhere – made €502m (£448m) in operating profits in the first half of 2018. That compares with a $257m (£196m) loss in 2016, the last full year they were owned by General Motors.

Carlos Tavares, the Peugeot boss, said that Vauxhall-opel could go from “being under pressure to being a hero”, and added he would “stick to the principle of no forced redundancies”. “We understand what being responsible means in terms of dealing with our workforce,” he added. “So the principle will remain: no forced redundancies.”

PSA bought Vauxhall-opel for €2.2bn last June, helping drive group revenues 40pc higherto €38.6bn and operating profits to €3bn, a 48pc rise. Profits at PSA’S major existing brands, Peugeot and Citroen, rose 30pc to €1.9bn.

Peugeot’s takeover had raised fears over the future of Vauxhall’s UK operations, which employ about 14,000 staff.

Since it took control, 650 jobs – one third of the workforce – have gone at Ellesmere Port, and the site has moved to a single production shift. The plant builds the Vauxhall Astra, which has sold poorly as motorists have switched to buying more fashionable SUVS.

Last year, Vauxhall sold just 195,000 cars in the UK, an annual drop of 22pc. This was more than three times the 5.7pc decline across the wider market.

The company has also agreed a deal to cut about 15pc of the 20,000 staff at the German-based Opel brand.

John Cooper, Unite’s Vauxhall convener, said: “PSA needs to back up its praise and repay the hard work of Vauxhall workers by investing in new models at Ellesmere Port.”

José Asumendi, the JP Morgan analyst, said: “This is simply the quickest turnaround I have seen in the auto industry in many years.”