New car model secures 2,100 jobs at UK plant

General Motors announced in May 2012 that it would produce a new generation of its Astra car at the UK’s Vauxhall plant at Ellesmere Port, near Liverpool, securing 2,100 jobs and creating 700 new positions. The decision followed approval by the Ellesmere Port workforce of an agreement aimed at increasing flexibility and cutting costs. It was feared that the plant could lose out on new work and be forced to close, but the company may now close a factory elsewhere in Europe.

Background

Opel/Vauxhall, the European arm of US-based General Motors (GM), will build the next generation of the Astra compact car at the Vauxhall plant at Ellesmere Port in north-west England and the Opel plant in Gliwice, Poland.

Opel/Vauxhall will invest £125 million (€155 million as of 19 June 2012) in the Ellesmere Port plant to prepare it for production of the new model starting in 2015. The factory will move from two- to three-shift operation and produce at least 160,000 vehicles annually.

The new Astra will secure the current 2,100 jobs at Ellesmere Port and the company plans to create 700 new positions as a result of the move to three-shift operation. Vauxhall will source at least 25% of parts used in the new model from local suppliers, which it estimates will create another 3,000 jobs in the UK.

Groundbreaking agreement

A key factor in the decision to allocate the new Astra to Ellesmere Port was what Vauxhall described as a ‘groundbreaking new labour agreement’ with the Unite trade union. The agreement was approved by 94% of the workforce in a ballot. In a press release on 22 May 2012, the company said that the deal would allow the plant to ‘implement a number of creative operating solutions to improve flexibility and reduce fixed costs and hence significantly improve its competitiveness’. As a result, Ellesmere Port will become ‘one of the most competitive plants in the Vauxhall/Opel manufacturing network’.

The agreement will take effect in 2013 and apply throughout the life of the next-generation Astra, into the early 2020s. It includes a four-year pay deal from 2013, under which wages will be frozen for the first two years, and then increase by inflation plus one percent in each of the next two years. The other main provisions of the deal are that:

  • new recruits will receive 70% of normal basic pay, rising in stages to the full rate over five years. Pension arrangements will also differ for new recruits;
  • a flexible working week will be introduced, with increased hours at time of high demand and lower hours during slacker periods;
  • the plant will operate for 51 weeks a year, with the current summer shutdown abolished;
  • a new ‘advanced’ operator grade will be introduced, with an increased maintenance role, while maintenance staff will work more flexibly;
  • the pay premium for shift working will be increased by around a third.

The Managing Director of Vauxhall Motors UK, Duncan Aldred, said: ‘We have been able to develop a responsible labour agreement that secures the plant’s future [and] ensures excellent cost competitiveness.’

‘Flexible workforce’ wins Astra production

The Astra decision forms part of an overall European restructuring plan to return the loss-making Opel/Vauxhall to profitability, with plants in effect competing among themselves to attract the allocation of new models. Earlier in 2012, it had been rumoured that Ellesmere Port would lose out and face closure. The UK government and unions lobbied GM to keep the factory open, although the government denies that any financial assistance was offered.

Vince Cable, the Secretary of State for Business, commented:

I am delighted for Vauxhall’s exemplary workforce and management who have all worked hard to make the cost savings needed and ensure that the UK remains at the centre of GM’s operations in Europe. The unions and the government also played a significant role in demonstrating to GM’s board that Vauxhall has a very flexible workforce and making the commercial case for their continued investment in the UK.

Unite’s General Secretary, Len McCluskey, said:

The company has made an offer to the workforce, which our members have accepted. From a position of uncertainty earlier this year, there is now a potential for a future at the plant until 2020 and beyond. We are very aware that this offer has implications for colleagues across GM. We will continue now to talk about the implications as a consequence of our members’ decision with our partners in Europe and the company’s management.

The decision to build the Astra at Ellesmere Port and Gliwice has raised uncertainty about the future of the Opel plant at Bochum, Germany.

Mark Carley, IRRU/SPIRE Associates

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