Will General Motors Pull Out Of The UK?

Factory

There's a lot of uncertainty surrounding the home of the Astra hatch.

A lot had been documented already on the impact of the UK's "Brexit" vote in the recent EU membership referendum and how it'll have an impact on Britain's car industry. On one hand, we've discussed how the outcome could potentially be disastrous for factories in the UK, and on the other we've had Audi state business will hopefully be as usual regardless of what happens when the Article 50-induced deadline comes about. A new report, though, takes a very negative stance on GM's future as a manufacturer in Britain.

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According to a report by LMC Automotive, General Motors' chances of remaining in the UK once the country formally leaves the European Union aren't exactly rosy. According to the document, there's a "high risk" that General Motors (a company that's consistently posted losses in Europe for many years now) will move production away from its bases in the UK to facilities on the European mainland, with LMC stating the relocation of Vauxhall/Opel Astra production from Ellesmere Port to either Germany or Poland could happen in 2021. It's also likely that the Vauxhall/Opel Vivaro van plant in Luton will also be culled by General Motors as it moves its European production to the other side of the English Channel.

Admittedly, a part of these forecasts do have the hypothetical scenario of a tariff-based trading relationship between the UK and the EU, which, when 3/4 of all the material used to build Astras is imported, would have a huge impact on Ellesmere's financial viability. However, even if Britain's future trade agreements allow General Motors to import everything it needs with no additional fees, there still is a lot of doubt over the future of the plant. Indeed, even before the EU referendum, Ellesmere Port had a lot of parallels with Peugeot's old Ryton plant, a factory that was closed in part because so much of the materials needed to build the cars there came from overseas.

Admittedly, there were other factors that contributed to the demise of the Ryton plant (as discussed by Autocar here) and the productivity of Ellesmere Port when combined with the current popularity of the Astra means the factory shouldn't be under threat in the short term. But a lot can happen between now and 2021, and we still have no idea what kind of trade deals the United Kingdom can negotiate when it formally leaves the European Union. So, while it's wrong to suggest that General Motors will definitely flee the UK while it still can, it's even more inappropriate to claim that the Vauxhall/Opel facilities in Ellesmere Port and Luton are safe from whatever is in store for a post-Brexit Britain.

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