Weekly News Review | 15 January 2018 | Automotive Purchasing and Supply Chain Automotive Purchasing and Supply Chain

Talking Point

Death by a thousand cuts?

In Imperial China one of the most brutal forms of execution was the infamous Death by a Thousand Cuts whereby the unfortunate victim would have body parts or collops of flesh cut off before he or she eventually expired. I was reminded of this gruesome procedure when I read last week of the latest cuts to the PSA workforce at its plant in Ellesmere Port in the northwest of England. Around 250 jobs will go in addition to the 400 announced last year as the plant, which produces the Vauxhall/Opel Astra, reduces its operations to a single shift thereby increasing its workers’ worries about the plant’s future.

According to figures from the Society of Motor Manufacturers and Traders, Vauxhall’s car sales fell by 22% to 195,137 last year. PSA’s declared aim when it bought Vauxhall/Opel from General Motors last year was to restore the brand’s declining profitability across Europe. Ellesmere Port is not the only plant to feel the pinch. PSA has also announced its intention to cut 1,300 jobs in France this year and to reduce workers’ hours in Germany.

Not surprisingly, the Unite trade union is up in arms over the proposals. Hardline union boss Len McCluskey was quoted as having tweeted, “I will make it crystal clear [to PSA CEO Carlos Tavares] that if there is any attempt to close the plant, we will make sure their market in the UK is finished for good.” Quite how he intends to accomplish this was not explained.

One option for PSA would be to transfer Ellesmere Port’s production in its entirety to the company’s plant in Gliwice, Poland. Poland is, of course, a member of the European Union and would not be affected by the uncertainty surrounding the UK’s Brexit negotiations. Such a move would, however, have potentially serious ramifications for the UK government. The closure of Ellesmere Port would certainly be blamed on Brexit, and perhaps with good reason, and its effect upon the UK electorate can only be imagined.

In a further initiative, PSA announced last week that Stephen Norman, a longtime industry veteran and former colleague of Carlos Tavares when the two were at Renault, will be leading the Vauxhall brand and will be charged with returning it to profitability. This may be a task akin to one of the labours of Hercules but, at least, it offers some hope to the company’s UK workforce.

Sam Ogle

Sam Ogle

Simon Duval Smith

Global News Editor:
Trisha Chowdhury

Sam Ogle

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Peter Wooding


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