Vauxhall's new boss says hard Brexit is an 'opportunity for UK suppliers'

Peugeot could get 'sweeteners' to keep Vauxhall plants

22 February

Peugeot could be offered "sweeteners" to keep open two Vauxhall plants if it takes over the European business of US carmaker General Motors, says the Daily Telegraph.

The paper speculates the government may follow through on its supportive stance to the factories' 4,500 workers by offering financial incentives to safeguard the facilities at Luton and Ellesmere Port.

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A source said to have "knowledge of sweeteners Nissan secured to maintain its giant Sunderland" suggested incentives could include business rates cuts and funding for staff training.

The government was accused of offering financial incentives to Nissan last year to boost production at its plant in Sunderland, the largest in the UK with 7,000 workers, despite the uncertainty of Brexit.

While the government denies any "sweetheart deal", unions have insisted that any preferential treatment be replicated for Vauxhall.

Dismissing talk that it offered any assurances to Nissan beyond that it will strike a positive Brexit trade deal, the government has said Vauxhall workers have "no reason" to fear for their jobs, says the BBC.

Business Secretary Greg Clark told parliament yesterday that Peugeot's management had "taken pride" in not closing factories and "understood that Vauxhall's plants are very efficient".

However, he "sidestepped a question about whether any sweeteners were on offer" to ensure Peugeot maintains manufacturing in the UK, adds the BBC.

The Times reports that Peugeot has offered limited assurances in the form of renewing job commitments already in place for 38,000 GM staff in Europe across both its Opel and Vauxhall brands.

"Yet analysts still believe that… jobs are at risk in the medium term with job commitments in the UK only lasting through to the end of the decade," it adds.

Vauxhall pension black hole 'could scupper' buyout

20 February

A black hole in the Vauxhall pension scheme estimated to be about £1bn "could scupper" the proposed buyout of the carmaker by Peugeot, says the BBC.

Vauxhall's pension scheme is one of the largest in the UK with 15,000 members. Around half of them have already retired and are receiving their pensions.

"According to company filings to the end of 2014 – the latest available – the pension scheme had assets of about £1.8bn but liabilities of about £2.6bn, leaving a deficit of £840m," says the BBC.

Since then, ultra-low interest rates and falling government bond yields have eroded returns and widened deficits across the industry, says pensions expert John Ralfe.

Given the cost of funding the deficit now and in the future, Peugeot will not want to touch it "with a barge pole", he adds.

"At best it's a stumbling block, at worst it could be a deal breaker," he added.

Another possible scenario is that Peugeot buys the operating assets of the business, but not the company as a whole that contains the pension scheme, said Ralfe.

"The trouble with that is that that would then be a company with no assets, so what would have to happen... is that [Vauxhall's US parent company] General Motors US would have to issue a guarantee for that UK company".

Ralfe says that while politicians are "running around all over the place asking about jobs, they should also be running around asking about pensions".

Ministers in the UK are worried that the takeover of General Motors's European arm, including Vauxhall in the UK and Opel on the Continent, could threaten 35,000 British jobs.

There are two Vauxhall factories in the UK in Luton and Bedfordshire and these employ between 3,500 and 4,500 people. The two factories could see production pulled in favour of factories in mainland Europe ahead of Brexit.

A further 23,000 people work across Vauxhall's sales network – and thousands more jobs are supported throughout its supply chain.

Business Secretary Greg Clark has already held "constructive" talks with Peugeot bosses and now Theresa May has accepted an invitation to hold discussions with the company, says Sky News.

A spokesman for the firm said: "Our intention is to establish the same maturity in our exchanges in France, Germany and the UK."

Greg Clark plays down Vauxhall jobs fears

17 February

Business Secretary Greg Clark has played down the threat to thousands of jobs at two major Vauxhall car plants in the UK after talk of a takeover of the operations by Peugeot.

PSA, the French giant behind the Peugeot and Citroen brands, has confirmed it is in buyout talks with US carmaker General Motors (GM), which is looking to sell its loss-making European business, including the Opel brand on the continent and Vauxhall in the UK.

Experts believe the deal only makes sense if PSA slims down the manufacturing operations and that, in the middle of Brexit uncertainty, this threatens Vauxhall's plants at Ellesmere Port and Luton, which reports variously cite as employing 3,500 or 4,500 jobs.

However, Clark said yesterday that he had been "reassured" after talks with GM chairman Dan Ammann, reports The Guardian.

He said: "There is some way to go in discussions… but I was reassured by GM’s intention, communicated to me, to build on the success of these operations rather than rationalise them."

More important than GM's intentions, of course, are those of PSA and the Business Secretary flew to Paris for talks with members of the company's board and French industry minister Christophe Sirugue, says the Daily Telegraph.

Describing the discussions as "constructive", Clark added: "They stressed that they valued highly the enduring strength of the Vauxhall brand, underpinned by its committed workforce.

"While discussions are still on-going, they made clear to me that… these were strengths they would wish to build on."

The Telegraph adds that beyond the workers directly employed at the two factories, there are 23,000 people working in Vauxhall's retail and support operations, and a further 7,000 people in its supply chain.

Some industry sources offered more hope to UK workers by stressing the "uniqueness of the Vauxhall business [that] could yet emerge as a strength", says The Times.

It continues: "Vauxhall is Britain’s second biggest selling brand and although most of its models are built by Opel on the Continent, brand strength could be damaged if the last Vauxhall plant were to close.

"Similarly, the pay and pension cuts that Ellesmere Port workers took in 2011 make it possibly GM Europe's most profitable plant and more efficient than all Opel's German factories."

May must offer Vauxhall 'same support as Nissan', say unions

16 February

Theresa May is "facing her first big Brexit industrial crisis", says The Times, after it emerged that US automobile giant General Motors (GM) is in talks with PSA, the French owner of the Peugeot and Citroen brands, over a sale of its Opel and Vauxhall business in Continental Europe and the UK.

Experts said any deal for the operations, which have been loss-making since the turn of the century, would imperil 3,500 jobs at Vauxhall's plants in Ellesmere Port and Luton.

"Analysts are certain that any deal will herald aggressive rationalisation of the Opel Vauxhall assets," says the Times.

"PSA would be more likely to shut plants in Britain - where future investment would be clouded by the uncertainties of withdrawal from the European Union and potentially the single market - than risk angering German trade unions and politicians."

Unions have demanded that Theresa May offer significant financial incentives to ensure Vauxhall keeps building in the UK.

Len McCluskey, general secretary of the Unite union that represents car workers, said: "GM has a moral obligation not to turn its back on the communities and workers who have helped make this company what it is today.

"Without a shadow of doubt, UK car plants must be offered the same assurances as those given by government to Nissan," referring to the deal many believe the government offered the Japanese carmaker last autumn to stay in the UK and ensure the future of 7,000 jobs in Sunderland.

However, the government has always insisted it did not offer Nissan a preferential deal. The company itself last month indicated the assurances were more to do with the wider Brexit deal, saying its UK investment is not set in stone.

"Obviously when the package comes, you are going to have to re-evaluate the situation, and say, okay, is the competitiveness of your plant preserved or not," Nissan boss Carlos Ghosn said, according to The Independent.

A spokesman for the Department of Business, Energy and Industrial Strategy said the government is in "close contact" with GM and is "closely monitoring the situation", says the Daily Telegraph.

More than 3,000 Vauxhall jobs 'at risk' as GM mulls sale

15 February

More than 3,000 jobs at two iconic Vauxhall car plants in the UK are "at risk", says The Times.

The claim follows the shock announcement last night that the brand's parent, US automotive giant General Motors (GM), is in talks with French carmaker PSA, which owns Peugeot and Citroen, regarding the sale of its European arm.

GM's business in Europe has been loss-making since the turn of the century. It trades out of Germany as Opel, but is known under the historic Vauxhall badge in the UK.

Experts immediately sounded a warning on the future of two UK plants and the 3,000 jobs they support.

"A PSA takeover of the chronically loss-making European arm of GM… is likely to be all about consolidating the industry on a continent plagued by over-capacity," says the Times.

"If PSA is aiming to buy Opel Vauxhall with a view to slimming down the number of plants, it seems unlikely — especially with the onset of Brexit — that it would invest in the UK plants."

Dave Leggett, editor of just-auto.com editor, wrote: "It’s hard to avoid the conclusion that rationalising the plant-product mix to take out cost would have to be on the agenda.

“Where might the axe fall? Would relatively high-cost German plants be vulnerable? It could be politically difficult to push in that direction.

“A more obvious weak point for GM’s European manufacturing operations is its UK plants. Exchange rate losses on trade flows between UK and Europe are one major difficulty facing UK operations."

Vauxhall employs 2,000 at its Ellesmere Port plant, which is at barely half capacity having last year built 120,000 Astras, "a car that is also produced at GM’s low-cost factory at Gliwice in Poland".

Its factory in Luton, where more than 1,000 are employed, is thought to make 60,000 Vivaros a year, although a version is also built in France under an agreement with Renault.

GM has tried to sell its European arm before and agreed a deal with Canadian car parts firm Magna in 2009 before abandoning the sale. It later took a stake in Peugeot in 2012, but sold it the following year.

Buying Opel Vauxhall would make Peugeot the second-largest carmaker in Europe, with a market share of more than 16 per cent.