Government urged to back UK manufacturing after Vauxhall’s sale
The sale of carmaker Vauxhall to the French automotive giant PSA is the “first test of the Government’s commitment to supporting UK manufacturing in the new world”, according to the MP for Ellesmere Port and Neston.
Justin Madders, whose constituency has a Vauxhall factory with thousands of workers, said he was meeting Business Secretary Greg Clark last night to emphasise “the need for the Government to commit to doing whatever it takes to protect British jobs”.
The £1.9 billion merger will see PSA become the second-largest automotive company in Europe, with a 17% market share.
The UK factories at Ellesmere Port – which includes workers living in North Wales – and Luton employ some 4,500 workers, and work “must begin in earnest to put UK production in the best possible position”, Mr Madders added.
The Labour MP said PSA had guaranteed existing production runs, meaning jobs will be protected until “around 2021”.
He said: “There is no doubt that we have some of the most efficient plants in Europe so we have a good tale to tell and we should not underestimate the positive impact on sales having a UK manufacturing base brings.”
Former business secretary Sir Vince Cable warned Brexit could make it harder to save the Vauxhall jobs.
The Liberal Democrat, who backed the Remain cause, said there is a “serious question mark” about the Vauxhall plants in the medium term.
He added German chancellor Angela Merkel’s government will put pressure on the French to protect Vauxhall’s sister company Opel’s plants in her country.
He told BBC Radio 4’s Today programme: “There is one big doubt, which is the future of the customs union, the single market arrangements.
“Car components have to go backwards and forwards across frontiers and they will require tariffs and checks.
“Vauxhall particularly is exposed to this, about 80% of its exports are to the European Union, most of its components are.
“If you are a hard-headed car executive looking at the competitiveness of Britain versus German plants, Britain I’m afraid is going to slip down the ranking in future.”
There will be a European “political dimension” to the future of the businesses, he said.
“The Germans are going to lobby very hard to protect their own plants, the German government bringing pressure to bear on France, those two countries staying within the European Union, it tips the balance against the UK, regrettably.”
But Brexit could free the UK from state aid rules, allowing greater taxpayer-funded support for the plants, he acknowledged.
Mike Hawes, chief executive of The Society of Motor Manufacturers and Traders (SMMT), said: “We are hopeful that this deal will provide a positive future for the plants at Luton and Ellesmere Port and the wider supply chain given their inherent advantages.
“We have been encouraged by the active role government has played reassuring investors of its determination to safeguard our competitiveness despite the uncertainty of Brexit.
“The UK is a competitive player in the automotive industry thanks to its rich heritage, record levels of productivity, skilled workforce and strong collaboration with government.”