PSA boss ready to end Ellesmere Port output over no-deal Brexit

PSA has threatened to end car manufacturing in the UK if the country leaves the European Union with no trade agreement, according to a report.

PSA CEO Carlos Tavares told the Financial Times newspaper he was prepared to shut the company’s plant in Ellesmere Port, northwest England, if the UK government wasn’t able to secure an agreement with the EU prior to Brexit, which is scheduled for October 31.

The plant currently makes the Opel/Vauxhall Astra but its future has long been in doubt.

“Frankly, I would prefer to put it [the Astra] in Ellesmere Port, but if the conditions are bad and I cannot make it profitable then I have to protect the rest of the company and I will not do it,” Tavares told the Financial Times.

“We have an alternative to Ellesmere Port,” he said, without naming a plant.

The Astra is also made in Gliwice, Poland.

PSA has already said the new-generation Astra will be made at Opel’s factory in Russelsheim, Germany, starting in 2021 as well as Ellesmere Port, but only if the UK’s exit terms from the EU are favorable to continuing production there.

The Gliwice plant will switch to making large vans for PSA in 2021.

Automakers in the UK have been fiercely critical of the UK’s ruling Conservative Party’s handling of the country’s EU withdrawal, which has been delayed twice because the UK parliament failed to agree to the EU’s withdrawal terms.

The UK’s Society of Motor Manufacturers and Traders (SMMT) has taken a tough stance with incoming Prime Minster Boris Johnson after he stepped up preparations to leave without a deal.

"A no-deal Brexit presents an existential threat to our industry," SMMT CEO Mike Hawes wrote in a letter to Johnson last week.

A no-deal exit makes it almost certain that parts and finished vehicles will have tariffs applied at the border with the EU. Border bureaucracy would also slow down just-in-time parts deliveries.

Johnson, a prominent campaigner for leaving the EU, previously dismissed the fears of the auto industry, despite Ford Motor and Honda having already announced factory closures in the country since the public vote to leave the UK in 2016.

PSA has axed about 900 jobs at Ellesmere Port since buying Opel/Vauxhall from General Motors in 2017 in a bid to stem losses at the plant.

A separate PSA plant in Luton, southern England, is safe after it was awarded production of a new range of midsize vans starting this year.