17.5.2012 UK Vauxhall car plant saved by GM

General Motors has decided to keep Vauxhall's Ellesmere Port plant running, meaning 2,100 jobs have been saved.

Vince Cable, the Business Secretary, flew to the US in February when General Motors said it was losing money in the UK and there were fears for the plant's closure.

He said that he and the Government had managed to persuade General Motors that the UK was a "very good business environment" to make cars, but maintains that no financial inducements were offered to GM.

It has also been confirmed that the new Astra model will be built at Ellesmere Port from 2015, which will create additional jobs at the plant and safeguard its future until at least 2020. Around 700 further jobs will also be created as GM intends the plant to move from two 8-hour shifts to three.

Workers at the plant have been willing to accept new payment and conditions deal, which includes a four year pay deal and a change in shift patterns. The plant will remain functional 24 hours a day, seven days a week – breaking the long tradition of car plants closing during the summer and at Christmas.

Although it simply cheaper and easier to let workers go in the UK compared to elsewhere in Europe, analysts have said that the willingness of unions and workers to agree to the new pay and conditions played an important role in GM’s decision to keep the plant running.

GM will be exposed to several sources of money to invest into the plant, including Regional Growth Funds and the advanced manufacturing supply chain initiative.

Vauxhall Chairman and Managing Director, Duncan Aldred, said: "This is great news for the Ellesmere Port plant, our employees, the local community, our suppliers, the Vauxhall brand and the UK. We have been able to develop a responsible labour agreement that secures the plant's future. 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."