Vauxhall future uncertain after GM-PSA deal and Brexit vote
February 17, 2017
Benjamin D Katz, John Ainger, and Christopher Jasper Bloomberg via AutoNews.com
In March last year, UK Prime Minister David Cameron stood on the assembly line at the Vauxhall car plant in Ellesmere Port near Liverpool and warned that the factory was exactly the kind of success story that could be killed off by a vote to leave the European Union.
Less than 12 months on, Cameron is out of a job, his successor Theresa May is preparing a complete split from the EU and Vauxhall's future is uncertain as owner General Motors mulls the sale of its unprofitable European arm to France's PSA Group -- a move that may have been triggered by the Brexit vote.
With German politicians already lobbying to protect jobs at Vauxhall's sister brand Opel and PSA, part-owned by the French state, unlikely to favor cuts at its plants, a post-sale savings push would inevitably put the UK business under pressure even without the EU schism. The consequences of a so-called "hard Brexit" may leave it even more vulnerable.
"Opel has a huge problem with its plants not being fully utilized," said Thomas Goettle, head of automotive at PA Consulting in Frankfurt. "They are probably hammering out a deal that's in favor of Germany and France, so I don't see the brightest future for the UK." Either Ellesmere Port or Vauxhall's second plant at Luton, north of London, could close, he said.
Sad business if the brand (and the plants) are doomed. That said, there could be some significant opportunity if someone else wants to take over those assets. I've read about any number of Chinese automakers who would pay quite handsomely for a Western brand --- even one with as limited a market-presence as Vauxhall. We've seen SAIC take over MG and have limited production in Longbridge (the former MG Rover assembly plant). If PSA kills Vauxhall and starts importing Opels into the UK, then it's entirely possible (though incredibly difficult) that those assets might find a new owner.
For the sake of Vauxhall's employees, let's hope that any deal struck won't outright favor the Germans and the French over the Brits.
Since yesterday the French and German governments are in talk about the deal. Don't know if the British government is involved or even interested in it. Maybe Rupert can tell us more about it.
Technically, no. But most companies do not comment publicly about potential deals and ongoing discussions. The fact that there are public statements from both companies about this suggests it's almost a done deal.
If you read the article and look at the labor costs it's obvious which sites should be shut down. Those in Germany, their labor cost is more than twice that of the UK plants.
I mentioned to my buddy that if the Vauxhall plants get closed it could be a perfect opportunity for JLR to at least take over Ellesmere Port. As Ruperts Trooper mentioned, if JLR want to expand beyond Jaguar and LR/RR products they could build a new line of Rovers at Ellesmere port. I will say though that if PSA decide to close these UK plants due to BREXIT, and because it's easier, in favor of the German or mainland European factories and think the UK buyer will blithely buy a rebadged imported OPEL (or even just an Opel) then IMO UK sales will crater.
I will say though that if PSA decide to close these UK plants due to BREXIT, and because it's easier, in favor of the German or mainland European factories and think the UK buyer will blithely buy a rebadged imported OPEL (or even just an Opel) then IMO UK sales will crater.
Most Vauxhalls sold in the UK are imported anyway so no real change there - I think the saga will just accelerate the UK market switch from mainstream to German premium brands.
My son has Vauxhall Astra and Skoda Octavia on his shortlist to replace his Vectra-C - I can see that being resolved in Skoda's favour.
Think Vauxhall is in better shape than most think since Opel/PSA will view it as a minor issue and that it is more cost effective long term to just keep putting a different name on Opels for sale in current Vauxhall markets and will look for a way to grow RHD products in ASEAN, India, Japan and Oz markets.
Look for Opel/PSA/Vauxhall-Holden to become consolidated into a multi-national entity like Airbus with multi-government backing to get Opel/PSA/Vauxhall-Holden globally cost competitive and prop up sales with government fleet deals if needed.
GM is creating it's own demise with this move and think GM might be in more trouble than Vauxhall.
GM decided to kill Holden despite profitability and flexibility. GM owed the Germans far more than they did Australia for money invested during and before/after GFC and Metall AG is far stronger than Australian unions - and our government couldn't give a fig and in fact challenged them to go.
Now it looks like Opel/Vauxhall is going, it's even more a kick in the guts. To add insult to injury, GM is still facing massive shutdown costs for Holden when there was more than one party interested - but they're leaving it scorched earth. Whereas they're going to sell Opel as a going concern. No wonder GM is up against it.
Some food for thought. I think GM could sold Vauxhall separately to another carmaker. JLR might be a prime candidate but there might be other players (Renault-Nissan, Honda, Hyundai-Kia) who could be interested.
I think this was all about minimum disruption and making a sale ASAP, this is GM walking away
because it's looking at other places to invest funding with a better return.
The Vauxhall Ellesmere Port site is safe for 4 years, as Astra production can't be switched in that time, but threatened from 2021 when Astra-K's replacement is likely to be switched to a PSA platform.
The Vauxhall Luton plant is currently being reviewed as it builds Renault Trafic panel vans, not GM-sourced vehicles.
Slightly off-topic but it might be "the monkey throwing up a wrench breaking the mechanic" scenario with Vauxhall pensions. http://www.bbc.com/news/business-39021319
So Luton looks doomed now with Ellesmere Port to follow in 2021 - with those UK links gone just how much value does the Vauxhall brand have in the UK - little I suggest.
Think Opel/PSA/Vauxhall will retain some production in the UK to retain the marketshare that Vauxhall provides as it will always be the Home Country favourite in the UK, as will Opel in Germany and PSA brands in France, so I look for O/P/V to create a strategy where the pain is spread across Europe and key markets remain open with some local production remaining. Think that Opel/PSA/Vauxhall will get some Government short term support as well to maintain some plants to the point where the long term strategy, platform changes and production changes can be implemented.
As much as I know new GM platforms (d2xx, e2xx) were designed to last for two generations of Astras and Insignias... but with a life cycle of probably 5 years. So in my oppinion it would be best to keep same platforms for next generation and to start pushing developement of new platforms for 2025 now together with combined PSA and Opel forces. Go fully electric from then on and become a truly game changing brands. Opel should be positioned above Volkswagen (since it can take leverage now from becoming non-american owned brand and VW still fighting dieselgate), Peugeot above Skoda and Seat and positioned as most "premium" french car maker, and Citroen should compete with lower prices and funky design with Koreans. I see no future for DS brand now, but with some good work it could be a nice competition to MINI and Fiat 500 lineup. They will never be a true premium brand. Full stop.
As much as I know new GM platforms (d2xx, e2xx) were designed to last for two generations of Astras and Insignias... but with a life cycle of probably 5 years. So in my oppinion it would be best to keep same platforms for next generation and to start pushing developement of new platforms for 2025 now together with combined PSA and Opel forces.
PSA already have their EMP2 modular platform available - it's modern, lightweight, flexible sizing, FWD or FWD/AWD, car/CUV/SUV - when Astra-K and Insignia-B need replacing it makes no sense under PSA ownership not to move them off D2xx and E2xx which are just evolutions of Delta/Epsilon.
PSA production of HDi engines has reduced due to JLR and Volvo using Ingenium/VEA so there's merit in switching out the GM Whisper diesels at the mid-run facelift and using PSA units and taking up the slack.
yes I agree, but look at it this way- to move to EMP2 just for one generation and then to move again to some new platform which will probably be suited for electric power. Keeping Delta and Epsilon would save costs of retooling twice in just two generations.
Also, whisper diesel is better engine than HDI and its fully Opels product. No need to just dump it. I believe it would be best to make move towards real merge with electric cars. Gasoline engines era is near end and I think it would be more complicated to retool all Opel factories to suit PSA configuration than to skip few years before retooling for electric cars which is inevitable. They just need to speed up now and become leader in electrification. Volkswagen group already refocused all their powers on it.
PSA and Opel will need now to survive few years like this combining components as much as possible, but not spending big money on gasoline cars.
But truth is I am happy with technology PSA have. Their cars are very light and they have lowest CO2 emission in Europe. Only problem is that they have no replacement for Epsilon since they will kill off 508 and C5 as much as i know.
I would assume the whisper is GM power train NOT Opals and the FORD/PSA HDi units would RUN COMPUTERS that TALK to PSA group SUB systems VS the GMLAN based Opel units
I would say depending HOW "chummy" GM and PSA stay AFTER the sales and IF GM wants to WORK with PSA will effect the SPEED that PSA ditches GM tech
I doubt the ELECTRIC revolution will be here in 10 years to the POINT that petrol/Diesel is rendered pointless
I hope and wish that Ellsmere Port will stay to produce Opel/Peugeot small/compact RHD cars for the British market.
But for Luton it will be hard.....after an new Opel Van will be use not the Renault platform.
Also a lot of Opel Engine and Transmission plants (Tychy,Aspern,Szentgotthard,Kaiserslautern) and the Diesel engineering in Turin will be a hard time.
in the near future there will be only PSA Powertrain...
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