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Vince Cable urges GM to save Ellesmere Port factory

Business secretary flies to New York to ask General Motors executives to make a ‘long-term commitment’ to the UK

Business secretary Vince Cable has urged General Motors bosses to make a “long-term commitment” to the UK after holding a summit in New York with the carmaker over the closure threat facing the Ellesmere Port plant.

Cable met GM’s chief executive, Dan Akerson, and Steve Girsky, the group’s vice-chairman, in the US on Wednesday to state the case for saving the factory from a shutdown with the loss of 2,800 jobs. The meeting came as GM announced a global alliance with PSA Peugeot Citroën aimed at saving bn (£1.25bn) and turning round its perpetually loss-making European business.

A government source said the GM executives asked about research and development spending in the UK, while Cable urged GM to follow the example set by Jaguar Land Rover, BMW and Nissan over the past year and announce multimillion pound investments in Britain. The source said: “Both Girsky and Akerson were engaged and receptive. They were pleased that Vince Cable had gone to New York to make the case to them in person. Vince Cable also made a strong case for them to make a long-term commitment to the UK as others are doing. Investments from the automotive sector in the UK have been worth over £4bn in the last 18 months alone.”

However, it is understood that the UK government and trade unions, led by Unite, are running out of time to save Ellesmere Port. GM is set to make a decision on the plant and its European capacity plans “in next few weeks”, according to the source. It is understood that GM is seeking to reduce production capacity by around 400,000 units – the equivalent of two factories. Ellesmere Port and Bochum in Germany have been identified by GM as among the most likely candidates for closure in a bid to stem losses that reached 7m last year.

Announcing the Peugeot alliance on Wednesday, GM said it will create shared vehicle platforms with Europe’s second largest carmaker and launch a joint purchasing venture that will spend a total of 5bn a year with suppliers. Akerson refused to be drawn on the implications for the Ellesmere Port factory on the Wirral, saying it was “way too early” to consider whether the move would affect GM’s capacity plans in Europe.

GM has signalled that Ellesmere Port, where about 2,800 people work on the Astra series, is one of three European plants that could be closed as a consequence of the ongoing review. The review was announced last month as GM posted European losses that the world’s largest carmaker described as “simply unacceptable”. GM produces 1.4m cars a year in Europe under the Vauxhall and Opel brands.

Peugeot’s Philippe Varin, chairman of the managing board at Europe’s second largest car maker, said: “The overcapacity has to be dealt with independently by each partner. The alliance is not about dealing with capacity. The alliance does not replace what we have to do to sort out the capacity question.” © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds