Vauxhall to supply engines for Cadillac

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Vauxhall, the UK car maker, has won a break-through deal to build engines for a new Cadillac, one of the most prestigious names in American motoring.

Engine output at the company's Ellesmere Port plant, in Cheshire, will be raised by about 25,000 to 100,000 when the new car goes on sale in the US in late 1996.

General Motors, Vauxhall's parent company and manufacturer of the Cadillac, has never before sourced engines for its American models from the UK. It is believed to be the first time that a UK-made engine has gone into an American marque in large numbers.

Vauxhall said the deal to supply the 3-litre V6 engines was as a reward for improvements in quality and efficiency at Ellesmere Port. But there would be no new investment or increase in jobs at the 4,500-employer plant, which is running well below its capacity to produce 135,000 engines a year.

However, there was hope that the deal would open the door to further work for General Motors, the world's biggest car manufacturer. "As far as General Motors Europe is concerned, this is an important event," a spokesman said. "We are now producing stuff for the US market."

The new car, the Catera, will be unveiled at the Detroit Motor Show next week. It provides Cadillac, GM's flagship luxury division, with a much needed smaller car to compete against the BMW 3-series and Mercedes C- class.

The Catera, based on the Omega Elite platform, will be built at GM's Opel car plant near Frankfurt, Germany, and shipped to America. GM expects to sell about 25,000 Cateras in 1997, the first full year of production.

Cadillac already out-sells Ford's Lincoln model, BMW and Mercedes put together. But the company desperately needed a vehicle in the growing entry-level luxury car market, where expectations of quality and service are more important than brand loyalty.

The deal helps guarantee the future of Ellesmere Port, where productivity remains below Vauxhall's Luton plant. But the Cheshire plant's ageing car production line still needs significant investment.