NAA Update: The spotlight is on Vauxhall’s Ellesmere Port plant
As our newsletter is being finalised for publication, it has been confirmed that GM’s Opel/Vauxhall subsidiary and GM Financial’s European operations will join the PSA Group…
With the addition of Opel/Vauxhall, which generated revenue of €17.7 billion in 2016, PSA will become the second-largest automotive company in Europe, with a 17% market share.
Carlos Tavares, chairman of the Managing Board of PSA, has said “We are confident that the Opel/Vauxhall turnaround will significantly accelerate with our support, while respecting the commitments made by GM to the Opel/Vauxhall employees.”
The transaction will allow substantial economies of scale and synergies in purchasing, manufacturing and R&D. Opel/Vauxhall vehicles will progressively convert to PSA platforms over the coming years.
Around 35,000 people work with Vauxhall in the UK, including 4,500 at the plants in Ellesmere Port and Luton, 23,000 people in the retail network, and 7,000 people in the UK supply chain. Around 1,700 people work at the Ellesmere Port plant, which builds almost 150,000 Astras each year. The latest generation of the Astra recently won the 2016 European Car of the Year Award. The PSA Group has said that jobs at Ellesmere Port are safe until 2021.
But what does this mean for the longer-term future of the Vauxhall factory in the NAA’s area at Ellesmere Port? The hope is that with the input of the PSA Group and planned economies of scale, Ellesmere Port can expand profitably. However there is currently production over capacity in the European car factories of both GM and the PSA Group, with both companies offering cars in similar markets – markets which are under pressure from other brands – so in order to ensure financial viability, the issue of production capacity would have to be addressed.
In 2012 the Ellesmere Port factory won the contract to produce the new Astra as a result of its superior productivity compared to GM’s other European facilities. It is anticipated that this productivity will continue and this will be a compelling reason for the PSA Group to continue investing in the factory and to revitalise Vauxhall in the UK – and therefore provide opportunities for UK supply chain companies.
Of course another factor in the future of the Ellesmere Port factory is Brexit. It is hoped that the UK government communicates the same reassuring messages to PSA’s Carlos Tavares as it did to Nissan’s CEO Carlos Ghosn to secure – and expand – production at Nissan’s plant in Sunderland, as it is extremely important for the economy to maintain the 35,000 jobs connected with Vauxhall in the UK.
On that note, on 9 February I was at the North West launch of the Industrial Strategy with the Rt Hon Greg Clark MP, Secretary of State for Business, Energy, and Industrial Strategy, at the Tate Liverpool. It was at this event I realised how important it is for all of us to contribute during this consultation period on the future strategy – the government really is listening to what each one of us says and will obviously then have the difficult task of converting it into a white paper which is the forerunner of what will actually happen!
Therefore, please sign up to attend our workshop to develop the NAA response, for it to truly reflect our views. We already have the commitment from our chair Michael Straughan to be there in person and I’m expecting the majority of our Board Members from the large companies down to the smallest SME to be at the meeting. It is being held at PfL on 23 March and will be run by an experienced facilitator, and we have also been able to secure the attendance from one of the team who works for the minister. Link to Event
It was with regret that I heard about the death of Professor Garel Rhys CBE. I met Garel many times, mainly via the Welsh Automotive Forum where he was their chairman. He was an engaging speaker, exceedingly knowledgeable about the automotive industry with many reminiscences about the history of the industry. He could be outspoken, but isn’t that exactly one of the roles of academics – to challenge our thought processes. He will be sadly missed by everyone and at this time our thoughts are with his family, friends and all our colleagues at WAF.
If you were unable to attend our APC event on 18 January at Daresbury, or it was too far for you to travel, then please join us for a repeat in Huddersfield on 4 April – we will also look to include a short workshop on the Industrial Strategy at the same time.
Now is also the time to register for being part of the NAA exhibition stands; our Automechanika stand is filling up quite quickly so don’t wait, get your place booked this month! Link to NAA Exhibition.
I have had several questions in the last couple of weeks about future NAA events. I have mentioned the APC and Industrial Strategy events, but we are putting the finishing touches to a visit to Cummins Turbo Technologies on 16 May, and also visits being planned to Force Technology and Magna Transmissions (previously Getrag) all before the middle of the year. Keep an eye open in both the newsletter and the separate emails for notification that bookings are open for these events as we’re certain that they will be very popular and will be booked up very quickly.
And last, but not least… many of you will have heard me say in the past that I want to move to part-time work or fully retire when I reach a certain significant birthday – well now is the time to say that this year is that significant year and as a result I plan to stand down from the full-time CEO role, but remain in the business in a part-time role, supporting the technical activities of the business. This means that we are now advertising for a new CEO, here is the link to details of the position on our website. The role will also be advertised via both the NAA and my own LinkedIn accounts and we would appreciate it if you would forward it onto any contacts that you may have who may be interested in the role.