Grim news awaits hundreds of Vauxhall workers

Workers at car maker Vauxhall’s Ellesmere Port site will be told today (Monday, October 16) it must shed 400 out of a total of 1,800 jobs by Christmas.

French company PSA, which bought the loss-making company from General Motors in August, is cutting daily production shifts from two to one because of falling demand for the estate version of the Astra car which is made at the site.

The imminent cuts were first reported by Automotive News Europe and confirmed by the company on Friday evening.

The dismal news for workers is not wholly unexpected following the takeover by PSA, which also owns Peugeot and Citroën.

When it was owned by GM,Vauxhall-Opel lost money every year since 2000 and PSA chief executive Carlos Tavares has made it clear its factories must be profitable to survive.

Reports over the weekend suggest Vauxhall will attempt to make the cuts before the end of the year through voluntary redundancy, but that further cuts may follow.

In a statement, PSA said it “affirms its commitment to the Astra plant at Ellesmere Port”.

It went on: “The company has every confidence in the capability and skills of the Ellesmere Port workforce to deliver the necessary improvements in financial performance.”

Christian Stadler, of Warwick Business School, is Professor of Strategic Management and researches the car industry.

He said: “PSA has chosen Ellesmere Port mainly because the models produced there are less attractive than the junkier SUVs.

“Also, PSA has done well in recent years by being ruthless when it comes to efficiency. In July it reported an operating margin of 7.3%. Ellesmere Port is less efficient so not surprisingly, PSA is not planning to expand there.

“Brexit is also playing a role in this. PSA does not want to make any investment commitments before it is clear where the Brexit journey goes to for the UK.”