GM to spare Vauxhall/Opel at Ellesmere plant image

GM is expected to announce that it has spared itsVauxhall plant in Ellesmere Port the axe after securing support from the UK government, Financial Times reports.

The future of the factory has been in doubt over recent months as parent company General Motors (GM) looks to restructure its loss-making European arm, which includes Vauxhall and Opel.
Many feared the company could close the Cheshire plant.

However, under the new plan, the factory would move from two- to three-shift production, cut costs by sourcing more parts locally, and build the five-door version of the Astra. Total output would rise to 200,000 cars a year, from about 140,000 now.

The proposal would mean Astra production moving away from GM’s huge Russelsheim plant in Germany.
The plan will be “a comprehensive strategy with which we’ll return to profitability fast, regardless of any tailwind” from overall market developments, Karl-Friedrich Stracke said in a statement during a staff meeting at Opel’s main plant in Ruesselsheim, Germany.

“We’ll increase our margins, market share and revenue significantly by 2016,” he said.

GM Europe lost $700 million in 2011 and company officials have expressed their determination to turn around the Opel and Vauxhall brands. They have rejected speculation that the company may decide in the near term on plant closures, but worries have persisted.

The company lost $256 million in the region in this year’s first quarter, compared with a $5 million profit a year earlier.