Vauxhall reaffirms UK commitment with £80m

General Motors reaffirmed its commitment to its UK manufacturing operations yesterday by announcing an £80m investment in the Vauxhall car plant at Ellesmere Port on Merseyside despite uncertainties over whether the pound would enter the single currency.

General Motors reaffirmed its commitment to its UK manufacturing operations yesterday by announcing an £80m investment in the Vauxhall car plant at Ellesmere Port on Merseyside despite uncertainties over whether the pound would enter the single currency.

Rick Wagoner, GM's chairman and chief operating officer, said the euro was only one of the considerations GM took into account when planning its investment and not the most important one. "The euro was not a major factor in this decision," he said, referring to the Ellesmere Port investment. Mr Wagoner added, however, that if the Government's five economic tests were met and the UK did join the euro, then it "would remove some uncertainty".

The £80m upgrade comes on top of a £200m investment only 18 months ago and will enable Ellesmere Port to manufacture the new Astra alongside the existing Vectra.

Mr Wagoner also unveiled a new concept car from Vauxhall – the first in 25 years. The car, a two-seater sports roadster, is designed to spruce up Vauxhall's image as a manufacturer of reliable but dull family cars.

The concept car is Vauxhall's contender for the new roadster which GM intends to introduce worldwide and is based on the Pontiac Solstice which was first unveiled in Detroit 18 months ago. If it goes into production it would cost £20,000 to £25,000 and have what a spokesman described as a "distinctive design with the British market in mind".

Mr Wagoner said one of the problems Vauxhall plants had suffered from in the past was a reliance on one model and it was this that had caused financial hardship in the late 1990s, when the UK operation began to run into heavy losses. Vauxhall lost £100m in 2001 but analysts estimate it cut its losses last year to between £40m and £40m.

After the closure of the Luton car plant just over a year ago, Ellesmere port was designated a "flex" plant, meaning that it could produce either the Vectra or the Astra or both depending on demand for the cars and capacity utilisation at GM's other European factories.

Mr Wagoner reassured the Ellesmere Port workforce about the long-term future of the plant, saying GM liked to have manufacturing plants in countries where it sold cars. Vauxhall is the UK's second-biggest seller of cars.