- By Region
From the disaster of Triumph to triumph over disaster, the Merseyside motor industry’s long and winding road seems to have turned a corner.
General Motors is expected to confirm today that its Ellesmere Port plant is to build a new Astra model after a review of its future while Jaguar Land Rover continues to ramp up production of the Evoque “baby Range Rover” at Halewood, itself threatened with closure a decade ago.
Since the 1981 closure of Triumph’s Speke plant in Liverpool, which became a symbol of the “British disease” of strikes, low productivity and shop stewards rather than managers running factories, a question mark has hung over the area’s carmaking base.
But GM’s expected decision, which is reliant on the 2,100 strong workforce accepting radical changes to pay and working practices and should guarantee their jobs for a decade, is the latest dose of good news for the car industry. Foreign owners such as JLR, Nissan, Toyota and Honda are also committing to new vehicles and adding jobs at their plants.
GM, which sells under the Vauxhall brand in Britain, considered closing the Ellesmere Port plant and an Opel factory in Bochum, Germany, as part of a restructuring of its lossmaking European business. Now Bochum appears doomed.
Ellesmere Port, whose sole product is the Astra compact car, had looked vulnerable as it sources most of its parts from the continent in euros and exports most of its cars back there.
“The plant would have closed if the unions and government hadn’t got together and said, ‘Give us a go at making a stonking deal,’” one GM executive said this week.
The government insisted that the decision was made on commercial grounds – Ellesmere Port is regarded as the most productive GM plant in Europe.
Nevertheless, Vince Cable, the business secretary, was sufficiently concerned about its future to travel to New York in February for talks with GM.
He met Dan Akerson, chief executive, and Steve Girsky, vice-chairman, as part of a lobbying campaign and urged it to make a “long-term commitment” to Britain.
Lord Mandelson, Mr Cable’s Labour predecessor, held similar talks in 2009 when the plant looked under threat.
“Our automotive sector has turned around,” Lord Mandelson told the Financial Times this week. “It’s a combination of workforce changes, higher productivity and investment in research and development.”
Michael Straughan, former operations director at Halewood who is now manufacturing head of Bentley – the Crewe-based luxury carmaker employing 4,000, which is owned by VW – said workers deserved much of the credit.
“There’s great backing from the unions to improve productivity,” he said.
However, GM’s German-led European works council, which tried and failed to maintain a united front in negotiations with GM, accused the carmaker of using “divide and rule” tactics in talks with individual plants.
The GM decision comes days after JLR announced another £1bn of orders for UK suppliers and the creation of 300 jobs at a new Ellesmere Port logistics centre run by DHL. Paul Dyer of DHL said the north-west region was “fast becoming a major supply chain hub for the automotive industry”.
However, Mr Straughan said the supply chain remained “weak” because smaller companies had suffered in the downturn. “It is very difficult to attract foreign investment into the UK by suppliers. They have not seen this growth as sustainable.”
Mr Cable’s next priority is to change that view.