April 4, 2018 / 11:59 AM / 10 months ago

Peugeot to decide on future of UK Vauxhall car plant in 2020 - CEO

Carlos Tavares, Chief Executive Officer of Groupe PSA and Greg Clark, Britain's Secretary of State for Business, Energy and Industrial Strategy, walk around the production line at Vauxhall's Luton plant in Luton, Britain, April 4, 2018. REUTERS/Toby Melville

LUTON, England (Reuters) - Peugeot-maker PSA will decide in 2020 whether to keep its British Vauxhall car plant open with new investment as it improves efficiency and awaits the outcome of Brexit talks, the French automaker’s boss said on Wednesday.

PSA bought General Motors’ loss-making European arm last year, which includes both Opel and its British sister brand Vauxhall, and is trying to return it to profitability, cutting a third of the workforce at its British car plant.

On Wednesday, the firm unveiled new investment to boost van production by around two-thirds at its other British manufacturing site in the southern English town of Luton.

Chief Executive Carlos Tavares said whilst PSA had to decide now on boosting van output, it could wait until 2020 to make a decision regarding car production at Ellesmere Port, where he said the current run of Astra models ends as late as 2023.

“Product allocations need to be done reasonably three years ahead of the launch which means 2023 minus three equals 2020,” he said.

“2020 is a perfect meeting point for what is the result that we have achieved in terms of manufacturing competitiveness in terms of quality and cost.... and from the other side, what the UK is going to provide is what’s the final outcome of Brexit.”

The head of Britain’s biggest trade union, Unite, told Reuters he thought the firm could make a decision on putting in a new vehicle platform into Ellesmere Port sooner than 2020.

“We’d be expecting a lot earlier than that ... hopefully this year,” Len McCluskey said.

Editing by Stephen Addison

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