Vauxhall: Crunch talks to save Ellesmere Port plant continue

By Simon Jack
Business editor

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image captionThe Ellesmere Port plant currently builds an old model of the Vauxhall Astra.

Talks to secure the future of Vauxhall's Ellesmere Port plant will continue after no firm decision was taken on Wednesday.

A board meeting of Vauxhall's parent company ended without agreement on its fate, although an announcement is expected within 48 hours.

More than 1,000 people work at the site - with many more in the supply chain.

The business secretary has met the management of parent company Stellantis three times in the last six weeks.

The most recent meeting took place on Monday night, with talks involving government officials along with company management and representatives of the local authority.

"We are committed to ensuring the UK continues to be one of the best locations in the world for automotive manufacturing, and we're doing all we can to protect and create jobs, while securing a competitive future for the sector," a government spokesperson said.

The BBC understands that there are three main options on the table for the Cheshire plant:

  1. Continue production of internal combustion engine-powered cars - with the possible addition of a new hatchback model - for the short-term until the prospect of the ban on sales of new petrol and diesel vehicles in 2030 makes the plant obsolete within a few years.
  2. Make plans to wind down production at Ellesmere Port completely.
  3. Secure the plant's long-term future by committing to making a new generation of electric cars in the North West.

While number three is obviously the outcome the government and unions would prefer, it requires confidence that the UK will be able to build the necessary battery production facilities to service this and other UK car plants.

Currently, the only viable battery plant is in the North East, which works exclusively with its former owner Nissan.

Under the terms of the Brexit trade deal, it is possible for batteries made in the European Union (EU) to be installed in UK-assembled vehicles for export back to the EU (where most are sold). But industry experts say the economics don't make sense as the batteries are heavy and hard to transport as they are not currently permitted through the Channel Tunnel for safety reasons.

Doubts about the long-term future of the factory intensified after recent comments from the chief executive of the parent company Stellantis - the new name for the merged PSA and Fiat Chrysler.

Carlos Tavares referred to the "brutal" decision for the UK government to bring forward the ban on the sale of new petrol and diesel cars to 2030 and said it might make more sense to move future electric production closer to its biggest market in the EU.

Government officials are aware that the future of car production in the UK depends on a rapid scaling up of battery production and it is widely hoped Chancellor Rishi Sunak will address the issue in his Budget speech next Wednesday, which is coincidentally the same day that Stellantis announce their annual results and operating review.

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