Automaking giant Stellantis has made the decision to close its 120-year-old factory producing various Vauxhall vehicles. This move will affect over 1,000 employees who now face the tough choice of relocating 140 miles north or losing their jobs.
The $205 billion automaker has announced plans to shut down its Luton van manufacturing facility, located north of London, in April. This decision is aimed at consolidating Vauxhall manufacturing at its Ellesmere Port factory in Cheshire, which has been described by Stellantis as the UK’s first EV-only manufacturing plant.
Stellantis is currently dealing with UK regulations that require a certain percentage of electric vehicle sales before a ban on carbon-emitting vehicles in 2035. The demand for these next-generation cars is also facing some challenges.
Last year, the government set strict emissions targets for carmakers that gradually increase the percentage of EV sales. By 2024, EVs must make up 22% of automakers’ car sales and 10% of van sales in the UK, with these figures set to rise in the future.
Carmakers failing to meet these targets may face fines or buy credits from compliant companies. Stellantis, the owner of brands like Peugeot, Citroen, and Fiat, is particularly impacted by these ambitious goals.
In light of these challenges and issues in other markets, Stellantis announced a shift in operating margin forecast due to market conditions and competition.
Concerns Surrounding Worker Relocation
Stellantis has offered relocation support and attractive packages to employees willing to move to the northwest of England. However, this decision has been met with criticism from unions like Unite, who see it as a significant burden for workers.
The announcement has been labeled as “a complete slap in the face” for employees facing relocation. Unite has called for efforts to maintain historical vehicle manufacturing in Luton and urged government support in this matter.
As of now, a representative for Stellantis has not commented on the situation, despite past threats of closing the Vauxhall plant due to Brexit-related issues.
