Vauxhall has confirmed it will build the new Astra at its Ellesmere Port plant in Cheshire, safeguarding 2,100 jobs and creating a further 700.
The company, owned by US firm General Motors, has ended speculation about the facility’s future by promising an investment of £125m in order to upgrade it for a three-shift production cycle of the new vehicle.
The plan agrees a minimum of 160,000 vehicles to be produced each year from 2015, securing jobs into the early 2020.
Vauxhall chairman and managing director Duncan Aldred said the decision was the result of successful negotiations with the plant’s workforce.
‘We have been able to develop a responsible labour agreement that secures the plant’s future,’ he said in a statement.
‘This is assisted by the government’s industrial strategy; increasing its focus on the manufacturing sector and creating ideal ground for companies to build up long-term investments.’
The company said that, as part of the new labour agreement due to come into force in 2013, the plant would implement a number of creative operating solutions to improve flexibility and reduce fixed costs, significantly improving competitiveness.
Unite union general secretary Len McCluskey welcomed the agreement as moving the plant away from a position of uncertainty.
‘Importantly this move will also bring component supplier plants back into the UK, a development that strengthens our manufacturing base generally,’ he said.
Vauxhall said it would increase the proportion of locally sourced components for the Astra to at least 25 per cent, creating more jobs and further improving competitiveness.
UK car manufacturing rose by 9.3 per cent in April and was up 11.8 per cent over the first four months of the year, according to the Society of Motor Manufacturers and Traders (SMMT).
SMMT chief executive Paul Everitt said: ‘It is great news that Vauxhall will retain its Ellesmere Port plant and another important vote of confidence for the UK automotive industry, adding to the wave of recent investment decisions that have backed our facilities and workforce.
‘Manufacturing is now core to our country’s economy and the partnership forged between companies, employees, trades unions and government in the UK automotive industry demonstrates that the country is a globally competitive place to do business.’