Fresh doubts over future of Vauxhall factory amid £40bn merger plan

Union leaders seek ‘urgent’ talks as PSA and Fiat Chrysler agree a merger which one automotive expert warns could see the Ellesmere Port Astra plant under threat. Tony McDonough reports

Vauxhall Astra, Ellesmere Port
Vauxhall workers at Ellesmere Port produce the Astra model

 

Union leaders representing 900 workers at the Vauxhall car plant in Ellesmere Port are seeking an “urgent” meeting with French owner PSA over its plans to merge with Fiat Chrysler.

Both companies have agreed in principle to merge, creating the world’s fourth-largest automotive company. As as well as Vauxhall, PSA also owns the Peugeot and Citroen brands and one automotive expert is warning it could spell trouble for Ellesmere Port.

Fiat Chrysler is behind behind Jeep, Alfa Romeo, and Maserati and combining with PSA would create a company with a market value of around £40bn and would likely lead to significant costs savings.

Cost-cutting

The deal will add to the uncertainty over the future of the Ellesmere Port factory, which assemble around 140,000 Astras every year. Significant cost-cutting has seen the site lose around 1,000 workers over the past couple of years.

Workers at the plant are hoping PSA will agree to the next generation Astra being built there and securing its future for several years. But the company has yet to make a decision amid a challenging car market and uncertainty over Brexit.

Now the Unite Union, which represents around 3,000 PSA employees in the UK, is seeing talks with the company het a clearer idea what the deal would mean for its members.

Unite national officer Des Quinn said: “Unite is seeking an urgent high level meeting with PSA over merger talks with Fiat Chrysler.

“Merger talks combined with Brexit uncertainty is deeply unsettling for Vauxhall’s UK workforce which is one of the most efficient in Europe. The fact remains, merger or not, if PSA wants to use a great British brand like Vauxhall to sell cars and vans in the UK, then it has to make them here in the UK.”

Plant closures

Automotive expert, Prof David Bailey, from the Birmingham Business School, told the BBC that unions are right to be concerned over the future of the Ellesmere Port factory as he believes a merger “isn’t going to be achievable without plant closures and significant job cuts”.

He added that though Ellesmere Port is considered to be efficient, the Italian government will want to to keep Fiat’s factories, and the French government is part-owner of PSA and so has an interest in protecting its own factories.

“I have a real fear that if this merger goes ahead the likes of Ellesmere Port, which is a very efficient plant, could be sacrificed to get the sort of savings the company is looking for, especially in all the uncertainty over Brexit,” explained Prof Bailey.

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