Vauxhall seeks state aid to save Ellesmere Port as 900 jobs axed

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The Independent Online

Vauxhall has applied for grant aid from the Government in an attempt to prevent the complete closure of its Ellesmere Port car plant on Merseyside, it emerged yesterday.

The move came as Vauxhall's owner, General Motors, confirmed it was axing the night shift at the plant with the loss of 900 jobs. It pledged, however, that the redundancies would be achieved on a voluntary basis.

In the Commons, Tony Blair pledged to speak personally to GM's chief executive, Rick Wagoner, about the prospects for Ellesmere Port and offer any government support that was appropriate. Union leaders, meanwhile, urged workers not to accept voluntary redundancy until the future of the plant was secure and called for a boycott of Vauxhall cars if Ellesmere Port did close.

Vauxhall is understood to have asked the Department of Trade and Industry for between £5m and £15m of assistance to support its attempt to build the replacement for the Astra at Ellesmere Port.

The decision on where the car is to be built is due to be made in the first half of next year and if Ellesmere Port is unsuccessful it means the almost certain closure of the plant and the loss of the remaining 2,300 jobs.

Jonathan Browning, the chairman of Vauxhall, said yesterday the reduction from three to two shifts at Ellesmere Port would put manning levels on a par with those at rival GM car plants on the Continent. The Astra is also made at Bochum in Germany and Antwerp in Belgium.

"Among the current Astra plants, Ellesmere Port has the highest costs," Mr Browning said. "It definitely has a chance of building the next Astra but we have to work with the Government, the trades unions and local authorities to make sure we put in a competitive bid."

Carl-Peter Forster, the president of GM Europe, said the cutbacks at Ellesmere Port were not something it expected to see repeated during the lifetime of the current Astra, nor were they "an indicator of future product allocation decisions".

The existing Astra is due to be phased out in 2009 or 2010 when the replacement model goes into production. GM has made it clear it is unlikely to be produced on more than two sites.

GM has shed 12,000 jobs from its operations on the Continent in the past few years. Mr Browning said the reduction in the UK workforce would make it competitive by "significantly" reducing the number of man hours it took to build a car.

On a visit to Ellesmere Port yesterday morning, Alastair Darling, the Trade and Industry Secretary, said he was "extremely disappointed" to learn of the job cuts but pledged the Government would do all it could to ensure the plant was successful in its attempt to build the new Astra.

But the mood among workers leaving the plant was gloomy. Simon Jones, 41, from Buckley in north Wales, who has worked at the plant for 20 years, said: "I am extremely worried. We have got a third of the workforce going which will affect our ability to put a bid in for the next model. It could see the end of production at Ellesmere Port."

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