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Vauxhall to cut 400 jobs at Ellesmere Port factory amid falling sales

Vauxhall said it is facing challenging European market conditions as demand for traditional family cars, such as the Astra, declines in favour of SUVs

Vauxhall said the decision to cut jobs at the UK site is not related to Brexit

Vauxhall is putting 400 jobs at its Ellesmere Port car plant on the chopping block in an effort to lower costs after dismal sales.

The carmaker will brief workers at the site, which has nearly 1,800 employees and produces about 680 Astra vehicles a day, today.

The jobs are expected to go by Christmas, largely via voluntary redundancies.

A spokesman for the company said Vauxhall is "facing challenging European market conditions” as demand for traditional family cars, such as the Astra, falls in favour of trendier SUVs.

The decision to cut jobs comes after Peugeot and Citroen owner PSA Group bought Vauxhall earlier this year. PSA said manufacturing costs at the Ellesmere Port were much higher than those of similar plants in France.

PSA insisted the move was not related to Brexit but future investments in the plant were on hold until negotiations on the UK’s future with the European Union became clearer.

Brexit and the pound

Carmakers in the UK are concerned that Brexit will result in tariffs and trade barriers on British cars exported to the EU, which could hurt demand.

PSA said a weaker pound since the Brexit vote has also raised the costs of importing components.

“The company has every confidence in the capability and skills of the Ellesmere Port workforce to deliver the necessary improvements in financial performance,” PSA said in a statement.

“Once it has enough visibility on the future trading relationship with the EU, and the plant competitiveness has been addressed, the company will be in a position to consider future investments.”

PSA boss Carlos Tavares had previously assured the UK government and Unite union that jobs would be protected and production at Ellesmere would be assured until at least 2021. He had also said manufacturing of the Vivaro van in Luton would be guaranteed until 2025.

Unite said it would not comment on job losses until it had spoken to shop stewards at Ellesmere Port today. 

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