Vauxhall to avoid job losses at Ellesmere

The British motor industry enjoyed its best news in many months yesterday, when GM Europe's new chief executive, Nick Reilly, offered an assurance that there will be no closure or job losses at Vauxhall's Ellesmere Port plant in Merseyside, and that it would be moving to three-shift production, utilising its full capacity.

It follows announcements earlier in the week that suggested that the auto giant's Belgian factory near Antwerp is in jeopardy. Although no plant closures are planned for Opel in Germany, GM said yesterday that about 60 per cent of the group's planned total of 9,000 job cuts would be in Germany. Mr Reilly warned that "difficult decisions" would have to be made.

After a long series of negotiations with possible suitors, GM decided to retain its European arm earlier this month, with pressure from the EU Commission on the validity of the state aid being offered by the German government. The former putative owner, Magna, was spanning some 600 voluntary redundancies at Vauxhall, with possibility of large losses later on. However, GM offered no specific assurances on the future of Vauxhall's van factory in Luton. An announcement on that is expected in the next few days.

In a statement the company said; "The proposed plan is for Ellesmere Port to move to a three-shift production operation in 2011. To support the launch in 2010 of the new Astra Sports Tourer and to prepare for the third shift introduction in 2011, the plan is for no redundancies."

Despite well received new models such as the Insignia and Astra, GM Europe says that production will be cut by about 20 per cent.

After the failure this week of the deal with the sports car maker Koenigsegg and Chinese interests to buy Saab, GM's threatened Swedish operation is still seeking a new partner.