Vauxhall Cheshire plant’s future hangs in balance as decision expected ‘imminently’

Some 1,000 workers are employed at the factory

Talks failed to reach an agreement on Wednesday (AFP via Getty Images)

A decision on whether Vauxhall's Cheshire plant is to close or not is expected on Thursday, in what analysts believe is the first big test of Britain's car-making ambitions post-Brexit.

Talks on how to save the plant in Ellesmere Port, which employs up to 1,000 workers and makes Vauxhall's Astra model, have been ongoing for weeks, with UK business secretary Kwasi Kwarteng involved in some meetings.

Stellantis, the new parent company of Vauxhall, has been reviewing its options for plants – including Ellesmere Port – where three options are reportedly on the table.

Executives are said to be mulling over continuing with the production of combustion engine-powered cars at the site, shutting it down entirely, or securing the factory's long-term future by making new electric cars.

Doubts about the future of the Ellesmere Port site intensified last month when Stellantis chief Carlos Tavares hit out at the UK's “brutal” decision to announce a ban on new diesel and petrol cars in the country by 2030.

Mr Tavares had also previously cited Brexit as a reason for jeopardising the plant's future, suggesting it made more sense to invest “close to the market where you sell the highest volume”.

Analysts believe any decision will show if ministers are serious about battery power, and green technology, which needs money investing in giga plants for batteries.

At present, there is only one viable battery plant in England, which works exclusively with its former owner Nissan, according to the BBC.

If Stellantis was to pledge to secure the plant's future by making electric cars, analysts say, then it would seek assurances that the UK is committed to building the facilities needed to support battery production.

Union officials believe the UK needs at least seven battery plants to cope with the increasing switch to battery technology.

The best-case scenario for the automobile business would be a decision to make a new generation of electric cars at Ellesmere Port, industry leaders say.

Labour’s shadow business secretary Ed Miliband said the government must do all it can to save the plant.

He said: "The Ellesmere Port plant is a major employer and winding it down would have devastating consequences, with 1,000 highly skilled jobs lost from the local community.

"To support our automotive manufacturing industry and boost its competitiveness, Labour has called for ambitious investment in electric vehicle technology, including the electric battery supply chain, through a £30bn green economic recovery. This investment would mean manufacturers have the long-term confidence they need to build new electric models in the UK."

He added: "The government must not simply stand by, because doing so risks worsening the unemployment crisis and dealing a huge blow to Cheshire and the automotive industry. They must act with real urgency to support our manufacturing industry and the jobs they provide."

A government spokesperson said: "We are committed to ensuring the UK continues to be one of the best locations in the world for automotive manufacturing, and we're doing all we can to protect and create jobs while securing a competitive future for the sector.

"We regularly speak with all automotive companies, including Stellantis, but do not comment on ongoing discussions."

Additional reporting by Press Association