January 11, 2018 / 10:43 AM / 2 months ago

Peugeot's new UK Vauxhall boss says car plant's future linked to sales

LONDON (Reuters) - The new boss of Peugeot’s (PEUP.PA) British Vauxhall brand said the future of the carmaker’s Ellesmere Port plant, where a third of the workforce is being cut, is closely linked to Opel-Vauxhall’s sales, which have nosedived in Britain.

FILE PHOTO: A Vauxhall Astra car is seen in the car park of the Vauxhall car plant in Ellesmere Port, Britain, January 10, 2018. REUTERS/Phil Noble/File Photo

Peugeot acquired Vauxhall and Opel last year when it bought General Motors’ loss-making European arm and has been pursuing a restructuring plan to return it to profitability.

On Thursday the French automaker appointed sales and marketing officer Stephen Norman to lead its British Vauxhall brand and Irish Opel unit, just days after the French carmaker announced further job cuts in Britain.

On Monday it said another 250 jobs would go at its Ellesmere Port plant in northwest England, on top of 400 cuts last year, reducing the workforce by a third to make it more efficient, but renewing workers’ fears about the future.

Stephen Norman, who takes over as Vauxhall managing director on Feb. 1, told reporters on Thursday the future of Ellesmere Port was connected to the firm’s sales performance.

A Peugeot car is seen in the car park of the Vauxhall car plant in Ellesmere Port, Britain, January 10, 2018. REUTERS/Phil Nobl

“The two are inextricably linked,” Norman said.

“If we manage to make a radical improvement in Vauxhall’s fortunes in the UK and my future colleagues in Opel across the continent do the same in their markets, particularly in Germany, then there will be a requirement not only for every possible unit of production that we’ve got but maybe even more besides.”

    Norman will need to turn around sliding sales in what has traditionally been Opel-Vauxhall’s biggest market and where demand fell 22 percent in 2017, compared with an overall market decline of 5.7 percent, according to industry data.

    He faces the challenge of defending Ellesmere Port with Peugeot due to decide as soon as this year whether to keep the plant open with new models, in the latest test of Britain’s ability to attract investment as it leaves the European Union.

    Norman, who joined PSA Group in May 2014 as Chief Marketing Officer and was appointed Senior Vice President, Chief Sales and Marketing Officer in 2016, said Brexit made planning harder.

    “So long as there are two, three or possibly more sets of viable hypotheses (due to Brexit) with different forecasts and different financial parameters, it’s very difficult to make a clear decision,” he said.

    Editing by Stephen Addison and Mark Potter

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