Vauxhall's Luton suppliers 'get guaranteed contracts'

4 January 2001
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04 January 2001 | Cathy Hayward

Suppliers to Vauxhall's Luton plant have been guaranteed future contracts with other Vauxhall or General Motors plants when it closes at the end of the year, according to the car maker.

Trade unions claimed up to 10,000 jobs would disappear among suppliers. But Vauxhall said they will receive new contracts with the spring start of production for the new Vivaro van and the revamped assembly line for the Frontera van at the neighbouring plant of IBC Vehicles, a GM subsidiary.

"While we're cutting down production in one area, we're ramping it up in another, and our suppliers can follow us," a Vauxhall spokesman told SM. Suppliers that are part of GM's worldwide sourcing arrangement will transfer to Vectra production elsewhere, probably in Belgium or Germany, he said.

Trade body the Society of Motor Manufacturers and Traders welcomed the Vauxhall statement, believing it underlined a long-term future for suppliers. "There are numerous opportunities for suppliers in the UK," said a spokesman.

Jaguar has doubled production at its Coventry plant over the past year and begins work on the latest X-Type this year. Landrover is increasing production of the Freelander off-road vehicle, and both Rolls-Royce and Bentley are producing new models, he said.

But one of Vauxhall's leading component suppliers dismissed the announcement as a PR exercise. "I'm sceptical that contracts can be guaranteed in this competitive market. If Vectra production moves to Europe, we would be competing with rivals with cheaper prices because of the strength of sterling," said the firm's supply manager.

And Peter Cooke, head of the centre for automotive industries management at Nottingham Trent University, said the idea that old Vauxhall suppliers could compete for the contracts with other makers was "farcical". "They would have to compete with those manufacturers' current suppliers and you would have to treble the output to reach the 146,000 cars produced by Vauxhall at Luton every year," he said.

Cooke claimed GM's worldwide cutbacks would mean fewer cars and less opportunities for suppliers.

"Although global first-tier suppliers will undoubtedly receive new contracts, second- and third-tier suppliers will suffer. Their geographical immobility will come home to roost," he said.


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