A shadow is cast over Ellesmere Port, despite denials, as GM Europe warns it will run out of money, reports Alex Turner

VAUXHALL’s 2,200 workers at its Ellesmere Port plant were caught up in a Europe-wide show of brinkmanship yesterday as doubt was cast over its future.

Its parent company General Motors (GM) sought to pressurise European governments into providing £3bn in financial support and named the Wirral site, and its sister plant in Luton, as possible targets for closure. GM Europe also warned it will hit liquidity problems in the second quarter and threatened that up to 300,000 jobs were at risk across Europe – including 50,000 directly employed by the company – if it ran out of money.

However, the renewed claims about the viability of the European division were overshadowed by a row about the future of its UK sites.

Carl-Peter Forster, GM Europe’s president, was reported as saying “the next step would be closure” for Ellesmere Port and its sister plant in Luton unless the company received support from the UK Government.

“We are very lean in the UK, in Ellesmere Port, same in Luton,” he said. “Obviously the next step would be the complete closure. Obviously that's what we try and avoid.

“But, if we don't get support from the Government, we will have to close down.”

GM UK issued a strong response hours later, stating “there are no plans for [Vauxhall in the UK] to be axed”.

They said his comments were about the need for EU government support for GM Europe as a whole, in order to restructure, and was not a direct threat to the UK sites.

In a statement, GM UK said: “It was highlighted during an official press conference at the Geneva Motor Show that Vauxhall was a very strong and successful brand in the UK and there are no plans for it to be axed.

“The decision to continue manufacturing operations in the UK was reviewed two years ago and this has proved to be the correct decision.

“Both Ellesmere Port and Luton are very lean and efficient plants, and as a result Ellesmere Port remains the lead production plant for the next generation Astra that is scheduled for launch in quarter three of 2009.

“The comments made relating to plant closures were in response to General Motors Europe's request for financial support from a number of European governments. This was specified in the GM viability plan handed to the German government and does not just relate to the UK.”