PSA Ellesmere Port factory investment will hang on EU trade deal

Boss Carlos Tavares is 'eager to invest' in the Vauxhall plant, but says that tariffs between the UK and the EU could jeopardise his plans

PSA boss Carlos Tavares remains “eager to invest” in Vauxhall’s Ellesmere Port factory should a suitable business case be made for it off the back of UK-EU trade deal talks.

However, should tariffs be imposed on cars or car parts then Tavares said the UK government would need to make the investment as it “would not be ethical” for PSA’s employees at profitable factories outside the UK to be paying for an arrears at Ellesmere Port, where the Astra is built, just to keep it running.

To that end, Tavares repeated his call for a free trade deal between the EU and UK. “If conditions of trade are positive, and there are no tariffs, then most of the investment would be made by PSA,” he said. “We don’t want to be a burden and want to bring wealth and value. But it is fair to ask the UK to create the business for this to fly.”

Tavares said PSA “respected and loved” its workers at Ellesmere Port, “but it was also time for the UK government to respect and love its people and support them. We’re trying to support them, and we’re really crossing fingers for good sense to prevail”.

A decision on whether or not Ellesmere Port will be one of two PSA plants to build the next-generation Astra hinges on the outcome of these trade talks.

Tavares said he was very happy with the overall performance of the Opel/Vauxhall business, and it had generated €1.1billion of profits last year at a margin of 6.5%. “I express thanks to and appreciate the efforts of all Vauxhall employees,” said Tavares.

On PSA’s wider production in general, Tavares said he hoped the firms plants in China could reopen on March 11 following government clearance after shutdowns caused by the coronavirus. For its European operations, some 300 of its 8000 suppliers come from China, and Tavares said that the firm was “looking at alternatives and so far have been successful”.

While production was holding up, keeping up consumer confidence to ensure demand remains would be the next phase of what the coronavirus brings, said Tavares.

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