Automaking giant Stellantis has announced plans to shutter its 120-year-old factory that makes several Vauxhall vehicles, leaving more than 1,000 employees with the daunting dilemma of relocating 140 miles north or losing their jobs.
The $205 billion automaker said it planned to cease operations at its Luton van manufacturing facility north of London in April to consolidate Vauxhall manufacturing at its Ellesmere Port factory in the North West county of Cheshire, which Stellantis described as the U.K.’s first EV-only manufacturing facility.
Stellantis is struggling with U.K. rules to sell a minimum share of electric vehicles ahead of a ban in 2035 as demand for the next-generation cars falters.
Ex-prime minister Rishi Sunak’s former Conservative government implemented strict emissions targets for carmakers last year that would gradually increase how many EVs a carmaker should sell before an outright ban on carbon-emitting vehicles in 2035.
In 2024, EVs need to make up 22% of automakers’ car sales and 10% of van sales in the U.K. This figure will gradually increase in the coming years.
Firms face a £15,000 fine for every vehicle sold over these thresholds, though carmakers that miss the target are able to buy credits from companies that make it.
Stellantis, which also owns European brands like Peugeot, Citroen, and Fiat, has reason to be concerned with the ambitious targets.
Alongside a faltering premiumization push in the U.S., the company said in October that its European market had been impacted by “production gaps in several models as a global product transition begins… and headwinds from a challenging European market environment.”
In September, the group lowered its operating margin forecast from double figures to between 5.5% and 7% owing to a worsening global market and in-roads from Chinese competitors.
Relocation a ‘slap in the face’ for workers
Stellantis said it would offer “relocation support” and “an attractive package” to hundreds of employees if they agreed to up sticks to the north west of England, adding it was in negotiations with unions about the terms of the relocation.
The U.K.’s business secretary, Jonathan Reynolds, said the relocation announcement was a “better outcome and it could have been.”
However, Unite, the union that represents Vauxhall workers at Luton, said the announcement was “a complete slap in the face” for the employees facing a 140-mile relocation, as the crow flies.
“Whatever the positive benefits this plan may have for Ellesmere Port, that is not acceptable.
“We stand ready to support our members in doing whatever we can to ensure that historical vehicle manufacturing is maintained in Luton and we call on the government to do the same.”
A representative for Stellantis didn’t immediately respond to a request for comment.
Stellantis has threatened on several occasions in the past to shutter its Vauxhall plant. In May last year, the carmaker said it may have to close its Luton plant if the U.K. didn’t renegotiate Brexit agreements that would see import tariffs of up to 10% on car parts to the EU.
