There hasn’t been much to smile about during the economic downturn, but there's cause for celebration in Ellesmere Port this morning. General Motors has confirmed it will invest heavily in the area’s Vauxhall plant. 2,100 jobs will be saved with 700 more created, as existing staff voted 94 per cent in favour of a new pay and conditions deal.
They want you to buy a new Vauxhall, their next-gen Astra, and Ellesmere Port has been chosen to build it. Production will be split between the Merseyside-based plant and a plant in Gliwice, Poland. Vauxhall is the UK arm of Opel, GM's European unit. There were serious concerns that the economic downturn would lead to the closure of the Ellesmere Port plant, as GM’s European losses reached $747m (£470m) last year. The Vauxhall plant was cited as a likely closure during restructuring.
Port in a Storm
The Ellesmere Port plant celebrates its fiftieth anniversary this year, and currently manufactures the Astra Sports Tourer. It produced some 140,000 new cars last year – the Vauxhall plant is a huge source of employment on Merseyside, and its closure would have been catastrophic for the northwest. As news of possible large-scale redundancies broke, politicians and trade union officials worked extremely hard to convince the company of continuing to operate in the UK. Central to these talks was current Business Secretary, Vince Cable.
Luckily for Ellesmere Port, Vinny has the gift of the gab. He held talks with senior GM executives, and has since revealed that no financial incentives were offered to GM. Cable says of the deal, "Today's decision to ballot the workforce signals a very strong vote of confidence by General Motors in the UK automotive industry and is the culmination of weeks of hard work and behind-the-scenes talking between the company, the unions and the government."
United we Stand
Indeed, the unions also played a key role in securing the plant’s future, including Tony Woodley, a former general secretary of Unite. Only earlier this week, Unite put a new structured labour deal to the workforce, which has emphatically voted in favour to the new terms and conditions. A four-year pay deal will be introduced, and new shift patterns will keep the plant operating 24 hours a day, seven days a week. That will see the end of summer and Christmas plant closures.
It’s to the workers’ credit that they’ve agreed to be so flexible with the new conditions. It’s notoriously difficult to close plants in mainland Europe due to politics. It's easier and more cost-effective to make factory redundancies in England than anywhere else in Western Europe.
Bye-bye Bochum...
It’s not good news for everybody, though. Ellesmere Port’s victory is likely to mean the death knell for the Opel plant in Bochum, Germany. Since 1999, the Opel company has lost $11bn (£7bn), meaning GM has no option but to restructure its overall operations. A number of analysts have pointed to manufacturing figures, claiming the company’s capacity for car making is simply out of touch with demand. There could be a silver lining for the Germans, though, as the Chevrolet brand is expected to move from Asia to Europe.
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