An employee inspects new Astras at Vauxhall’s Ellesmere Port plant.
GM has owned Vauxhall since 1925, building cars though a world war and global recessions, but earlier this year the future of the Merseyside plant faced its biggest threat.
After years of losing money in Europe, GM decided it was time to cut capacity. The eyes of management and Steve Girsky, the man put in charge of the restructuring, quickly fell on Ellesmere Port and the company’s site in Bochum, Germany.
That Ellesmere Port has survived is due to an unprecedented coordinated effort between Government, trade unions and Vauxhall’s 2,100 workers.
Trade unions have shown long-term thinking and made concessions, the Government has acted proactively and demonstrated an industrial strategy, and the skills and experience of Vauxhall workers at Ellesmere have come up trumps.
“We have shown what you can do where there is a clear strategy,” said Paul Everitt, chief executive of trade body the Society of Motor Manufacturers and Traders (SMMT). “That should resonate with other industries and parts of Government.”
It is now clear that when GM sources warned in February that Ellesmere could close, the Government, Vauxhall management and the trade unions sprang into action.
Vince Cable, the Business Secretary, travelled to Detroit to explain to the GM board – including chief executive Dan Akerson – why it should keep Ellesmere open.
The plant has always been one of GM’s most efficient – it employs 2,100 staff but can manufacture up to 187,000 vehicles a year, while Bochum employs 3,100 and has a capacity of 160,000. However, GM was concerned about the costs Ellesmere was racking up from importing parts from Europe and the potential backlash from powerful German unions of closing sites in the eurozone country.
“They wanted an assurance that the Government was behind the industry, which we are,” said Cable. “The car industry in the UK is a great success story.”
While Cable and his team were lobbying GM management, trade unions and Vauxhall workers – led by former Unite general secretary Tony Woodley and Vauxhall managing director Duncan Aldred – were putting together a plan to bring production of the next-generation Astra to the plant and guarantee its future.
Their proposal to GM involved making Ellesmere even more efficient by introducing greater flexibility among the workforce. Essentially, when the Astra was selling well they would work more – including overnight, at weekends and through the traditional summer holiday – and when sales were down they would down tools.
In car manufacturing such flexibility is a major benefit. Models can vary wildly in popularity depending on their age and the economic environment. German unions have been left on the back foot by the willingness of the UK workforce to be flexible in order to save jobs.
The icing on the cake for the Ellesmere rescue plan appears to have been the personal intervention of David Cameron, who made phone calls to GM in Detroit to lay out the Coalition’s commitment to car manufacturing. “The PM has been our star player,” said Mark Prisk, the Manufacturing Minister. “These things matter. In the past we have underestimated relationship building. We are moving away from the old habit that ministers just turn up to cut the ribbon at the end.”
But ironically, the foundations for this coordinated effort were laid by Labour’s Business Secretary, Lord Mandelson, in the depths of the recession.
In 2009 he launched the Automotive Council, a body made up of government and industry representatives.
Through the council, car makers have been able to tell Government exactly what is needed to allow them to invest – a clear strategy, support for the supply chain, investment in apprenticeship schemes, and not just blank cheques.
The results have been significant. More than £4bn of new investment into the UK has been committed by car makers such as Jaguar Land Rover in the last year.
Now Ellesmere has been saved, seemingly at the expense of rivals in Germany, where no car plant has
closed since the Second World War.
“This is a real boost to UK manufacturing and shows we can take on all comers,” Mr Prisk said.