Vauxhall car company staff have voted by 94% in favour of a new pay and conditions deal, clearing the way for investment in the Ellesmere Port plant. Owner General Motors will confirm this morning that a new Astra model will be built at the plant, securing about 2100 jobs.
Many people had feared that the Ellesmere Port factory would close in a GM restructuring. Vince Cable, the Business Secretary, told the BBC that no financial inducements were offered to GM. GM’s investment will also mean that hundreds more jobs will be created at the plant as it moves from two shifts to three.
Dr. Cable described the Astra news as “a good story” and said it underlined that the UK was “a good business environment for the motor industry”.
Amid fears that the plant could close, Dr. Cable held top-level talks with GM executives in a bid to secure the factory’s future. These talks involved “making the case that the UK is the place to be”, he said. On subsidies, Dr. Cable said there would be “nothing specific”, other than the general development funds available to all companies.
The decision amounts to a remarkable turnaround in the fortunes of the plant. Vauxhall is the UK arm of Opel, GM’s European unit. Since 1999, Opel has lost $11bn (£7bn), almost a quarter of it during the last two or three years. Last year, Opel lost $750m.
Analysts say that its carmaking capacity is out of step with demand. The company has been working on a restructuring plan for months. Now it is thought that workers in Germany may be hit with the possible closure of GM’s Opel factory in Bochum. Bochum produces 30 cars an hour over three shifts a day. Ellesmere Port produces 47 cars an hour over two shifts a day – a company record.
But Germany could yet benefit from an expected decision to move production of its Chevrolet brand from Asia to Europe.
Workers at the plant have been voting on a new labour deal covering pay and terms and conditions. There will be a new four-year pay deal. Workers will also face a change in normal hours due to the change in shift patterns. It is understood that the plan will keep the plant operating 24 hours a day, seven days a week.
That will end the long tradition in car manufacturing of plant closures in the summer and during Christmas. The Ellesmere Port plant was thought to be vulnerable because it has traditionally been politically difficult to close plants in mainland Europe. Analysts also say it is simply cheaper and easier to let workers go in the UK than elsewhere in Western Europe.
However, the willingness of unions and workers at the plant to agree to more flexible working arrangements is thought to have played an important role in GM’s decision, as has the Government’s engagement on the issue in recent months. In February, Dr. Cable flew to the US and met GM’s Chief Executive, Dan Akerson, and Vice-Chairman, Steve Girsky.
He made the case for why GM should invest in the UK for the long term. Sources suggest the meeting may have played an important role in the company’s ultimate decision to back the UK. Although the Government insists that it has not offered the company any up-front cash, there are several sources of money – including the Regional Growth Fund and the advanced manufacturing supply chain initiative – that the company may be able to access.