Vauxhall workers will hear on Monday that nearly a quarter of jobs at the company’s Ellesmere Port site are being cut as the carmaker adapts to the decline of the traditional family car and rising costs.
About 400 of the 1,800 jobs at the site are expected to go by Christmas, largely via voluntary redundancies, as demand for the Astra continues to slip in favour of chunkier and trendier SUVs.
Under a proposal filed with the Unite union, the site in Cheshire will move to a single shift next year. The number of cars made there is expected to reduce from up to 150,000 per year to between 70,000 and 90,000.
The move comes after the Peugeot and Citroën owner PSA Group took over Vauxhall earlier this year and vowed to improve efficiency. PSA said manufacturing costs at Ellesmere Port were significantly higher than those of similar plants in France.
The company said it “affirms its commitment” to the plant and developing the Vauxhall brand, which has made cars in the UK since 1903. It insisted the decision was not linked to Brexit, but was a response to challenging European market conditions and a declining passenger car market in which sales of five-door saloons and estate cars such as the Astra are falling.
However, PSA made clear that future investments in the plant were on hold until negotiations on the UK’s future with the European Union had become clearer.
British carmakers are nervous about the prospect of tariffs or other trade barriers on British cars exported to the EU, which could deal a hammer blow to the sector. The falling value of the pound has already made it more costly to import components, the vast majority of which come from overseas.
“The company has every confidence in the capability and skills of the Ellesmere Port workforce to deliver the necessary improvements in financial performance,” PSA Group said in a statement.
“Once it has enough visibility on the future trading relationship with the EU, and the plant competitiveness has been addressed, the company will be in a position to consider future investments.”
Unite said it would not comment until workers had been informed and it had considered the detail of the offer.
Ahead of the buyout of Vauxhall’s parent Opel in March, the PSA boss, Carlos Tavares, assured the UK government and Unite that jobs would be protected and production at Ellesmere Port would be guaranteed until at least 2021. He said manufacturing of the Vivaro van in Luton would be guaranteed until 2025.
The former Nissan executive also said he was likely to carry out a major restructuring of General Motors’ former European operations which included Vauxhall in the UK and Opel in Germany, similar to the one he oversaw at PSA, which nearly went bankrupt three years ago. GM’s European car-making operation had been loss-making since 1999.