France’s PSA to cut jobs at UK Vauxhall plant

epa05836556 The logo of Vauxhall, photographed during the press day at the 87th Geneva International Motor Show in Geneva, Switzerland, 08 March 2017. The Motor Show will open its gates to the public from 9 to 19 March presenting more than 200 exhibitors and more than 148 world and European premieres.  EPA/MARTIAL TREZZINI

Bloomberg

PSA Group, the French automaker that purchased the Vauxhall and Opel brands, plans to cut 400 jobs at a UK plant in Ellesmere Port to adapt production to falling sales.
The site needs to improve its competitiveness to match the company’s plants in France, a PSA spokesman said. The uncertainty about the future trade deals between the UK and the European Union after Brexit also played a role in the decision.
PSA acquired the Vauxhall and Opel brands as part of its purchase of US-based General Motors Co.’s European operations in August. The French company, which gave assurances to the French, German and UK governments over jobs and keeping plants open, plans to detail its turnaround plan for the UK and German brands in November.
Investment decisions in the UK are halted until the company gets more visibility on the Brexit consequences, the spokesman said. Last month at the Frankfurt auto show, PSA CEO Carlos Tavares said the company would narrow down possible Brexit scenarios to two by Christmas, as he demanded guidance from authorities on possible outcomes.
The Ellesmere Port plant near Liverpool makes Astra sedans, demand for which has been falling. It currently employs 1,800 people. The 400 job cuts will be completed by the end of the year and will be voluntary departures, the spokesman said, as production shifts will be reduced from two to one.
The decision reflects Vauxhall’s market share loss in Europe. The brand had a 7.3 percent market share in the UK as of September, down from 8.9 percent a year earlier, according to Bloomberg Intelligence. Even as PSA has pledged to honour existing union agreements, “this opens the debate once again around whether PSA will close any of the Opel or Vauxhall plants,” Evercore ISI analyst Arndt Ellinghorst said.
“We see a strong argument for the closure of three plants by 2021-2022, given that production could be moved to existing plants without the need for significantly additional capacity,” he added, citing an Opel plant in Eisenach, Germany.

Leave a Reply

Send this to a friend