Vauxhall owner PSA holds Brexit gun to Ellesmere Port

The owner of Vauxhall says it plans to make the next generation Astra at Ellesmere Port - but only if certain Brexit and union conditions are met.

French carmaker PSA said a final decision on the investment from 2021 would depend on the terms of the UK's departure from the EU.

It mirrors similar worries among other UK manufacturers as the industry pleads for a no-deal Brexit to be ruled out.

The company said a new vehicle agreement, negotiated with Unite, would also have to be ratified.

The statement said: "Groupe PSA has today announced its intention to manufacture the next generation Astra in two plants in Europe."

"The group has confirmed that the Russelsheim plant will manufacture Astra and that it is planned that the second plant will be Ellesmere Port in the United Kingdom," the Peugeot-maker said.

Ellesmere Port currently employs 1,000 staff who work solely on the Astra.

The site currently produces right-hand and left-hand drive versions of the popular model, which is sold under the Opel brand on the continent.

The decision still represents a vote of confidence in Ellesmere Port - for the time being at least.

That is because the interim investment decision will see current Astra production leave a factory in Poland.

PSA made it clear when it bought the Vauxhall and Opel brands from General Motors that the group's factories across Europe were competing to remain open.

Opel's boss said the Astra work going to the Russelsheim plant in Germany, which would include an electric version, reflected hard work to bolster its competitiveness.

Vauxhall's statement largely mirrored that of PSA's but it stated: "Since the acquisition of Vauxhall Motors by Groupe PSA, we have been working hard to turn around the fortunes of the brand and to address the performance of the commercial and manufacturing divisions.

"Currently, the Vauxhall and Opel Astra are built in Ellesmere Port and in Gliwice - and our bestseller is still in the middle of its life cycle.

"Groupe PSA has today announced its intention to manufacture the next generation Astra in two plants in Europe."

It added: "This news demonstrates the continuous effort and commitment of Groupe PSA to Vauxhall Motors."

Unite regional coordinating officer Mick Chalmers said: "Unite has been in positive discussions with PSA about a new vehicle agreement and securing new models for Vauxhall's Ellesmere Port plant.

"A no-deal Brexit will destroy all of that along with the hope of securing the plant's long-term future."

MIke Hawes, the chief executive of indutry body the SMMT responded: "This latest news is potentially hugely positive but reinforces what we have been saying all along.

"The threat alone of a no deal Brexit is preventing companies from committing to investment in the UK."

The sector is under pressure on many other fronts too amid the drive for investment in electric cars to help the environment at a time of a slump in global demand - mostly a consequence of the US-China trade war.

These factors have contributed to Ford's decision to close its Bridgend engine plant and Honda's move to pull out of Swindon.

Both firms insisted there was no Brexit link.

Nevertheless, it has focused minds on the future as the UK car industry argues any tariffs and supply disruptions from a no-deal scenario risk fatally damaging competitiveness in a sector that exports 80% of what it makes.