Thousands of jobs saved as Ellesmere Port Vauxhall plant reprieved

The Business Secretary went to New York to urge GM to keep faith in workforce (PA)

The threatened Vauxhall plant in Ellesmere Port has been saved and hundreds of new jobs will be created there, its American parent company General Motors will announce today.

The factory in Cheshire will build the next generation of Astra cars, safeguarding its future until at least 2020. The plant's two eight-hour shifts each day will increase to three so that it works to full capacity, which could create about 700 jobs. GM's long-awaited decision will come as a huge relief to the 2,100 workers at the 50-year-old factory. Although it is one of the most productive car plants in Europe, it was at serious risk because the US giant has overcapacity in its European operations, which made a loss of £469m last year. Instead, GM is expected to announce shortly that a factory in Germany will close.

The decision is also good news for the British Government. Vince Cable, the Business Secretary, played an important role as a go-between for GM and the trade unions, who are balloting their members on a new pay and conditions deal.

Mr Cable travelled to New York in March to urge GM bosses to keep faith with its UK workforce, saying it was flexible about change. He pointed out the grants available under various government programmes, including its regional growth fund, apprenticeships schemes and enterprise zones. Although there is no lump sum subsidy from the Government, Vauxhall is expected to take advantage of some of these measures.

A spokesman for the Department for Business, Innovation and Skills said: "Huge efforts have been made to try to secure the future of the Vauxhall plant at Ellesmere Port and the Government has played an important role."