17 May 2012

Major investment in General Motors’ Ellesmere Port plant

The UK economy receives a boost as the US motor giant confirms a £125m investment in Vauxhall’s car plant in Cheshire, creating thousands of new jobs.

Vauxhall badge (Reuters)

The car giant said that the next generation of its Astra model will be built at the firm’s factory in Ellesmere Port meaning around 700 new jobs will be created at the site, with another 3,000 positions in firms which supply the plant with parts and services.

The announcement will secure the future of the plant into the next decade. The decision to build the new Astra in the UK will hit GM’s factory in Bochum, Germany.

The factory will move from two to three shift working to build the new Astra, while “unprecedented” levels of flexibility will be introduced.

Confirmation of the investment followed a 94 per cent vote in favour of a new pay and conditions package by the 2,100 workers at the site.

There had been speculation earlier this year that the plant could miss out on future investment which threatened to inflict heavy job losses on the area.

Business Secretary Vince Cable, and officials from the Unite union, have been lobbying the car firm for months in a bid to attract new investment, and their efforts appear to have paid off.

The new deal includes a four year pay agreement, production on 51 weeks a year and scrapping of the traditional summer and other closures which have been a part of UK industry for decades.

Vince Cable said he was “proud” to be at the factory for the announcement, describing it as a “very great day”. Dr Cable travelled to the United States to lobby Vauxhall owners General Motors on behalf of Ellesmere Port, saying today that its case “made itself”.

He added: “They wanted an assurance that the government was behind the industry, which we are. The car industry in the UK is a great success story.

“This is a success for team working. We have had business, unions and government working together in a very productive partnership.”

Opel, which is General Motors‘ European unit and includes the Vauxhall brand, has made hundreds of millions of pounds of losses over the last two decades, and last year posted losses of $750m.

The Ellesmere Port site is 50 years old this year and employs 2,100 workers, who are being consulted on a new labour agreement, believed to include pay, described by those close to the talks as ground-breaking.

Ellesmere Port currently builds the Astra Sports Tourer, making 140,000 models last year. The plant was first built in 1962, producing its first car, a Viva, two years later.