PSA Plant Upgrade Could Threaten Vauxhall Jobs

ELLESMERE PORT, U.K. – If auto workers in General Motors’ European wing were worried about the possible takeover by PSA Group, they might be downright rattled by news the French automaker is investing €200 million ($212 million) in the “birthplace” plant of its Peugeot marque.

The factory, which began producing trucks in 1912, is in the midst of a modernizing program dubbed “Sochaux 2022” aimed at turning the site into a benchmark plant in the heart of its historical homeland.

The news could be distressing to the 2,200 Vauxhall employees at the Ellesmere Port plant in Northwest England. Despite being the most efficient car plant in GM’s European portfolio, doubts about its future could arise if the U.K. follows through on the June 2016 referendum in favor of quitting the European Union. That could occur as soon as 2019.

Business experts expect that, should PSA realize its contemplated buyout of GM’s Vauxhall/Opel subsidiary, the French automaker will have to cut back on capacity resulting from a new organization having more than 20 plants combined.

Sources within PSA have told the Reuters news agency the French automaker would keep all four Opel plants in Germany open but has not decided whether to continue operating the Ellesmere Port complex and Vauxhall’s other U.K. facility at Luton.

They also doubt PSA, owned 13% by the French government and 14% by the founding French family Peugeot, will keep open production plants outside of the EU single market.

Len McCluskey, general secretary of the Unite union representing Vauxhall workers, met last week with GM President Dan Ammann and Greg Clark, the U.K. government’s secretary of state for business and industrial strategy.

After the meeting McCluskey said: “My immediate priority now is to understand where Peugeot is now in this process, which is why I am contacting the CEO of the company, Carlos Tavares, to request urgent talks.

“Unite is committed to talking to all the concerned parties in the U.K., Germany (where Opel is based) and France to ensure that the case for the U.K. workers is pressed at the highest levels. But I also say this: Our government should demand that whenever the car makers are meeting with the French and German governments, then the U.K. government must be at the same table.”