UK is preferred site for Vectra, says GM boss

Hopes that Vauxhall’s Ellesmere Port plant could build the new Vectra were boosted this week by General Motors’ head of European operations Mike Burns.

Speaking at the Detroit Auto Show, Burns said he would prefer production to come to Ellesmere Port if ‘the right solution’ could be found.

A decision is due to be made by GM’s European bosses next month. Antwerp, which like Ellesmere Port produces the Astra, is the Wirral plant’s main rival to be the second Vectra factory after Russelsheim in Germany.

Vauxhall engineers are working flat out on a feasibility study to demonstrate that Ellesmere Port is capable of acting as a ‘flex’ plant, juggling Astra and Vectra production on the same line to balance fluctuations in demand and make better use of capacity.

The bid was triggered by GM’s decision just before Christmas to close Vauxhall’s Luton plant, which had been in line to build the next Vectra.

Burns said a decision was ‘in the balance’. He added: ‘A lot depends on how Nick Reilly [chairman of Vauxhall] and the unions come together.’ Though Ellesmere Port would require more money to be invested, Burns said GM was prepared to invest ‘if we get the right solution’.

At the Detroit show, Nick Reilly warned that Ellesmere Port was at a disadvantage because the UK is outside the eurozone.

‘We have a currency risk that Antwerp and other plants do not face, and we’ve got to offset that with something else,’ he said.

Garel Rhys, professor of motor industry economics at Cardiff Business School, said the current exchange rate between sterling and the euro puts the UK at a 15–20% disadvantage with the eurozone.

‘Ellesmere Port would need a productivity advantage of that sort of order.’ he said.’The difficulty is persuading GM’s bosses in Europe that Ellesmere Port can keep that sort of advantage going for as long as Britain remains outside the euro.’

The new Vectra is due to go into production early next year. Production of the Astra will wind down as the current model nears the end of its life in 2004.

On the web