The future of the General Motors plant in Luton, IBC Vehicles, and its 1,000 workforce, is looking ‘doubtful’, despite assurances from GM bosses.
GM says it is ‘committed’ to manufacturing at Luton despite doubts over the plant’s future and a sharp tumble in revenues at the site.
Sales have slumped and a joint venture agreement between GM Europe and Renault to manufacture commercial vehicles at the plant expires in 2013.
New accounts filed at Companies House reveal that IBC Vehicles saw its sales slump by almost a third in 2009 to £601m as the commercial vehicle market has collapsed.
In its posted accounts, IBC said: ‘Output was lower throughout the year in line with the downturn in customer demand entirely due to the economic slowdown.
‘The plant discontinued its night shift production during the fourth quarter of 2009 and now operates a two shift production process.’
Overall, 54,207 vehicles were produced at Luton last year under the Vauxhall Vivaro, Renault Trafic and, the Nissan Primastar marques, down from 87,175 in 2008.
IBC added that demand for its vans across Europe ‘is expected to remain subdued during 2010 as the European economy will only be in the early stages of recovery’.
GM Europe and Renault are in negotiations over the future direction of their joint venture.
They have agreed to work together on a new generation of commercial vehicles, but the location of the joint venture is yet to be confirmed.
GM Europe is cutting 8,300 jobs, including 350 at Luton. however, Opel/Vauxhall chief executive Nick Reilly claimed he was ‘confident’ about securing the future of the Luton plant.
He said that GM ‘has some ideas for some other things’ if production of the commercial vehicles is moved elsewhere.
At the Paris Show on September 30, Reilly pointed to the company’s ‘product offensive’ and simultaneous investments at its manufacturing plants as proof that Opel/Vauxhall is ‘moving ahead with high speed’.
Over the last few weeks, the company has announced expansions of plants in Kaiserslautern, Germany and Szentgotthard, Hungary, where particularly efficient and powerful engines will be built.
The plant in Eisenach, Germany, will begin building a small car starting in 2013, marking Opel/Vauxhall’s entry into a new market segment.
Reilly told reporters: ‘We said at the beginning of this year that we would be investing 11 billion euros in new products and that we would be updating our entire portfolio.
‘We stand behind our words and have started to deliver on that very commitment.’
Expanding into new export markets was another important element of Opel/Vauxhall’s growth plan, he added. ‘Israel and Chile have already been announced – and there are more to come.’
Vauxhall managing director Duncan Aldred added: ‘Luton is the home of Vauxhall and has been since 1903. We are committed to maintaining production in Luton in some way, shape or form.’
The Luton and Ellesmere Port plants are considered among the most efficient in Europe, despite a 29 per cent slump in revenues at Luton in 2009.
Vauxhall made a pre-tax profit of £12.4m in 2009, down from £27.3m in 2008. The performance was boosted by workers agreeing to take a five per cent pay cut, leading to salary costs falling from £51.3m to £40.3m.