‘Massive impact’

Unite has called for urgent assurances over investment and jobs after Vauxhall announced today (October 16) that the car maker — bought out by Peugeot owners PSA Group earlier this year — will cut 400 jobs at Ellesmere Port due to falling sales.

PSA announced that it will cut one out of two production shifts early next year at the Ellesmere Port site, which makes the Astra models, because the company was “facing challenging European market conditions”.

The company blamed the fall in demand for traditional family cars like the Astra, as demand for alternatives such as sports utility vehicles (SUVs) has gone up.

It is anticipated that about 400 of the 1,800 jobs at Ellesmere Port will go by Christmas — largely from voluntary redundancy — and production will decrease from 150,000 cars each year to between 70,000 and 90,000.

A PSA spokesperson said the company was aiming to make the Ellesmere Port site more productive to ensure it gets the contract for the new Astra model in the early 2020s.

While PSA has said that today’s announcement was not Brexit-related, the company has said before that future investment will depend on certainty being reached in Brexit negotiations.

Prof David Bailey of Aston Business School pointed out to the BBC that “the depreciation of sterling since the Brexit vote has meant that the cost of importing components has gone up, so it’s a more costly plant.”

Brexit
Unite convener at the Ellesmere Port site John Cooper agreed that Brexit uncertainty has had a definite role to play in the latest announcement.

“Of course, changing consumer habits is one part of the picture, but the economic uncertainty in this country coming out of Brexit is also feeding into the decision. People aren’t going to be wanting to spend £20,000 on a new car when they aren’t financial secure.”

Unite general secretary Len McCluskey said today’s news was “extremely difficult to take.”

“To lose 400 skilled jobs at Vauxhall, albeit on a voluntary basis, is a major blow to the automotive industry and its supply chain. It is also another huge loss for the north west economy,” he added.

“Quite clearly, economic concerns are having a serious impact on consumer confidence. When people feel insecure about the future they do not invest in expenditure like a new car.”

Unite assistant general secretary Tony Burke also highlighted the impact on the local economy.

“This morning when our shop stewards came together to get a full report of the company’s proposals, I’ve got to say they were shocked,” Burke told BBC Radio 4 today (October 16).

“400 job losses at Ellesmere Port is significant and of course it will have a knock-on [effect] into the supply chain around the area as well, so this is bad news for the workers at Ellesmere Port but also very bad news for manufacturing in the North West.”

Cooper agreed.

“400 job losses out of 1,800 is a huge chunk and is clearly going to have a massive impact,” he said.

Cooper told UNITElive that in the short term, Unite is meeting with local managers but in the long-term, meetings with the “highest levels of management”, including PSA boss Carlos Tavares as well as with government will be necessary to guarantee the future for Vauxhall Ellesmere Port site.

Both Burke and McCluskey highlighted that Unite’s number one priority now was to protect jobs and get assurances over future investment.

“We are calling for meetings with the highest levels of the parent company PSA to ensure that there are no compulsory redundancies and that our plant continues to attract much needed investment,” McCluskey said. “That includes removing the uncertainty about a new model and clarity on Ellesmere Port’s future.”

‘Key issues’
Burke said that Unite ensuring all redundancies are voluntary will be “one of the key issues that we want to raise alongside a continuing commitment that he made in terms of new models to the Ellesmere Port site.”

Unite has called on the government to give UK automakers the certainty they need.

“This industry urgently needs economic and trading certainty so that it can build for a strong future in the UK,” McCluskey said. “We ask that ministers give PSA and other manufacturers a clear signal that government will do all it needs to do to support this crucial sector through the Brexit process.”

Burke said Unite has talked to all the major car manufacturers in the UK, with whom he says the union has good relations across the board.

“While no one is saying we’re going to be faced with big job losses, companies are saying to us that they need to think very very carefully about their future investments,” he said.

“We need to understand if we’re going to build new models in the UK for 2020/21, they need to be on the design board now.

“The problem is that PSA and a lot of other car companies in the UK — and don’t forget the jewel in the crown of UK manufacturing is our automative industry — they’ve got to make decisions,” Burke told BBC Radio 4. “And if they’re going to make investments , they want to know where they’re going to be done and they want some certainty.”