Government close to funding deal to guarantee car production at Cheshire site

A deal to guarantee the future of Ellesmere Port’s Vauxhall car plant and its 1,100 workers could be announced within days.

Reports claim plant owner, Stellantis, has secured government funding towards building a new electric vehicle at the Cheshire site.

It would mean the end of Astra production, which began in 1980, once the current model reaches the end of its lifecycle.

The Government, and Business Secretary Kwasi Kwarteng, have been in negotiations with the car maker since the start of the year over state aid to persuade the group not to shut the plant and move production to the European continent.

Mr Kwarteng has reportedly been increasingly confident in recent days that a deal would be agreed.

Fears were raised for car production at Ellesmere Port after Prime Minister Boris Johnson announced plans to ban new petrol and diesel cars in the UK from 2030.

Last month Alison Jones, Stellantis UK group managing director, announced that government funding for electric vehicles, and in particular, UK-based battery production, was key to the future of the Vauxhall plant.

She said: “The cost of manufacturing has practical components to it, energy being one of them. So when we’re considering what it takes to manufacture in the UK compared to other countries we have to assess the costs.

“So the discussion with government is, OK, how do we make our manufacturing base relevant and able to be done within the UK when you are competing effectively with other countries for that investment?”

She added: “We are part of Europe, geographically, we are a large market within Europe, so we should absolutely be considering asking our government to consider really pushing forward for that investment they spoke about an industrial strategy to end sale of combustion engines by 2030 and plug in hybrids by 2035.

“So contribute. Contribute in terms of that investment we need. You can’t just say it, you have to work out the investment required.

“We have been really clear, to be able to move to electric and plug-in hybrid vehicles we need the technology, the infrastructure for customers to be able to charge their vehicles, you need the energy companies to work on making that readily available.

“And then you need consumer behaviour, and where the Government comes in is to to influence with investment, and driving consumer behaviour.”

Automotive News Europe claimed last week that Vauxhall is considering making an electric van at Ellesmere Port, and the Financial Times has reported that an announcement could be made by Tuesday, July 6.

Manufacture of electric vans could exploit a growing market in the delivery vehicle sector following a huge increase driven by the coronavirus pandemic and its resultant lockdowns.

Stellantis was formed after the merger of Fiat-Chrysler and PSA, which includes Peugeot. The Ellesmere Port plant was previously owned by US car giant General Motors.