Ellesmere Port at 50: Vauxhall workers fear closure

Tension is growing for factory workers at the ‘Home of the Astra’ as the European arm of General Motors decides on its future

Vauxhall’s Ellesmere Port plant celebrates its 50th birthday this year but the mood at this car manufacturer on the Wirral peninsula is tense rather than celebratory.

The site is a no-go area for media amid ongoing speculation over its future, while staff and suppliers have been told to avoid reporters.

Outside the plant, attempts to photograph Astras awaiting delivery at the site’s distribution centre prompt a visit from security guards who ask the Guardian to desist.

One supplier, speaking anonymously, says the mood is “grim” as the 2,100 factory workers employed by Vauxhall await the outcome of an executive meeting on Wednesday that could be crucial to Ellesmere Port’s future.

The supervisory board of Opel/Vauxhall – the European arm of General Motors – is expected to discuss its business plan for 2012 to 2016, say sources close to high-level discussions over GM’s continental business.

An estimated 10,000 employees in the supply chain as well as the factory staff are desperate to know whether the next generation Astra, due to start production around 2015, will be built at Ellesmere Port. Intended as a statement of industrial pride, the huge “Home of the Astra” sign fixed to the front of the factory resembles a plea ahead of Wednesday’s gathering. GM is understood to believe that it is 400,000 units over capacity in Europe – the equivalent of two factories.

Sources close to high-level discussions between GM executives and political and trade union figures in the UK fear that Ellesmere Port and Bochum in Germany are the most likely candidates for closure. GM says it stands by a labour agreement that bars plant shutdowns before 2014, but the concern is that Ellesmere Port will be starved of work and the new Astra contract will go elsewhere. With no new work, the plant will then be vulnerable to shutdown.

“When the shadow of a new model comes up there is a bit of optimism and hope that you can get the model,” the supplier says. “But it’s quite the opposite. It’s all doom and gloom at the moment.” A voluntary redundancy programme is sending worrying signals, the supplier adds: “They are trying to reduce numbers all the time. Some of the people who are putting in for these separation packages are the sort of people you need if you are going to ramp up production.”

The backdrop to Ellesmere Port’s uncertain fate is excess production across Europe. According to IHS Automotive, the passenger car market for western Europe has slumped from 14.8m vehicles sold in 2007 to just over 12m expected this year, which has left the big-volume producers such as GM, Peugeot and Fiat with a serious imbalance between manufacturing supply and consumer demand. Plants like Ellesmere Port are the potential victims of this lopsided ratio, with the Wirral site harbouring potential capacity of 188,000 cars a year. Instead it produces 106,000.

The Unite trade union’s senior representative at the plant, John Featherstone, says the new Astra is key. Asked about the voluntary redundancy programme, he says employees will be needed if Ellesmere Port secures the contract. “We should not be looking to get rid of skilled people who can build cars.” Referring to Ellesmere Port’s reputation as GM’s most efficient European outfit, he adds: “We don’t want to get rid of a workforce that has exceeded expectations. And when the next generation Astra comes we need people to build it.”

Explaining the media shutdown, a Vauxhall spokesperson says press attention is unsettling a workforce that is operating in a competitive market. “To be and stay competitive is key in the automotive manufacturing environment where a plant’s performance is tightly measured. The Ellesmere Port plant is very competitive and we need to make sure our employees are able to focus on the job in hand to maintain this. Negative media speculation perpetuating over the last weeks is far from helpful and we therefore do not welcome media speculating on the plant’s future on our premises.” GM’s European operations lost $747m (£469m) last year.

David Bailey, a professor at Coventry University and car industry expert, believes internal company politics will also play a part. Germany is GM’s European heartland and he believes that cutting two plants there – other key German outposts are Eisenach and Russelheim – will be politically and industrially impossible.

“The over-capacity is in Germany but I don’t think they will get two closures past the board without a fight from IG Metall,” said Bailey, referring to one of Germany’s most powerful trade unions. “If they do go for two plant closures in Germany I think there will be an industrial relations war. They might be able to manage one [closure] without a massive strike. So they need another elsewhere and that is where Ellesmere Port comes in.”

Questions will be asked of the government and its industrial policy if Ellesmere Port is singled out for closure. This is an administration that has trumpeted a “march of the makers” to diversify the economy away from a financial services sector that accounts for about a tenth of GDP and a south-east and London region that generates a third of the nation’s turnover. Despite the apparent contradiction between that avowed aim and the looming scenario at Ellesmere Port, sources close to the discussions over its future are complimentary about the government’s behind-the-scenes work. A Whitehall source confirmed that ministers at the department for business, led by the business secretary, Vince Cable, remain in close contact with GM executives.

Cable has been clear, however, that state aid is not one of the options, despite a sense among some parties that this is becoming a game of industrial divide and rule as GM seeks concessions from individual European workforces and governments.

Bailey says Ellesmere Port needs government intervention in order to secure a long-term future, while new policies are required to avoid a repeat, such as a German-style part-time wage subsidy scheme where the state tops up salaries that have been reduced by shift cuts.

“If the government was able to offer a loan guarantee for restructuring or support launch aid for building a new car model at Ellesmere Port, a rescue might happen. But without a much broader industrial policy, which we don’t have currently, it is very vulnerable.”

John Featherstone, an employee at the plant for the past 34 years, says there are no birthday celebrations planned yet. “We are not giving that any thought at all. We just want to make sure we are around for the next 50 years.”

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