UK plants at risk in talks for PSA to acquire Opel/Vauxhall

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Photo by Vauxhall The Astra Tourer began production at the Vauxhall Ellesmere Port plant in 2016.

General Motors' potential sale of its Opel/Vauxhall operations to PSA Group has led to fears that factories in the UK may be shuttered.

The UK, where Opel cars are sold as Vauxhalls, is GM's fourth-biggest market after the US, China and Brazil. GM has two vehicle plants in England.

GM builds the Astra compact car in Ellesmere Port, northwest England, and light commercial vans in Luton, near London. The plants employ 4,500 people.

Ellesmere Port is vulnerable to closure because local parts content is 24%, compared with a 41% average for UK car plants, said Garel Rhys, a motor industry academic at the Cardiff Business School. "It is less anchored in the UK than others. If you tipped the table, Ellesmere Port would fall off first," Rhys told Automotive News Europe, sister publication of Plastics News Europe.

The factory shares production of the Astra with a GM factory in Gliwice, Poland, and there have been fears in the past that the Polish factory could become the sole production facilities for European Astra models.

UK plants are already vulnerable after the country voted to leave the European Union. The EU could impose tariffs of 10% on cars exported from the UK to mainland Europe. The tariffs could make Ellesmere Port and Luton uncompetitive in the tight-margin mainstream market. "Brexit is a complication the British car industry could do without," Rhys said.

Ellesmere Port was due to be shut in 2012 but a deal with unions persuaded GM to keep it running and close an Opel factory in Bochum, Germany, instead. Ellesmere Port started building the latest-generation Astra in 2015 "securing the plant's future well into 2020s," GM said at the time.

Last year the plant built 120,000 cars, up from 70,000 in 2014, and is now considered by industry watchers to be profitable.

Read Automotive News Europe article.

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