PSA Appears Ready To Shut Down UK’s Ellesmere Port Factory Over No-Deal Brexit

PSA Group, the owner of Opel and Vauxhall, is reportedly ready to shut down all production from its Ellesmere Port factory in the UK and switch to a plant in mainland Europe if Brexit hurts their profitability.

Carlos Tavares, PSA Group’s CEO told the Financial Times that they have already found a site in southern Europe to produce the Opel/Vauxhall Astra if the UK government fails to deliver a satisfactory outcome once the country leaves the EU.

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“Frankly I would prefer to put it (the Astra model) in Ellesmere Port but if the conditions are bad and I cannot make it profitable then I have to protect the rest of the company and I will not do it,” Tavares said. “We have an alternative to Ellesmere Port.”

PSA Group has already said that, starting in 2021, the next-generation of the Opel Astra will be produced in Russelsheim, Germany as well as Ellesmere Port in the UK, the latter only if the country’s exit terms from the EU means it makes sense for them to continue production there.

Tavares’ latest remarks reveal the growing concerns over a no-deal Brexit or even a negotiated settlement that will hit the car maker’s profits because of tariffs and custom checks. SMMT, the UK’s car trade body, also warned Boris Johnson, the country’s new PM, that a no-deal Brexit poses an “existential threat” to the industry.

Ellesmere Port is considered to be the most heavily exposed car factory in the UK, with 80 percent of its production exported to Europe and around three quarters of its components being imported.

“We need visibility on what is going to happen in October,” Mr Tavares said, referring to trade conditions with Europe.

“For us it’s quite simple; we need visibility on customs; that’s all. We need visibility on customs for parts coming from continental Europe or from the rest of the world, and we need visibility on the customs for cars coming out of the UK to continental Europe. Those are the only things we need; everything else we’ll take care of.”