PARIS -- PSA Group said Thursday that a decision on whether to build its next-generation Astra compact car in Ellesmere Port, England, would depend on the final terms of Britain's departure from the European Union.
A no-deal Brexit could mean tariffs on goods produced in the UK and exported to the EU -- and, likewise, levies on EU products sent to the UK. That would likely doom the plant, where about 800 jobs have been cut at since PSA bought Opel/Vauxhall from General Motor in 2017 amid a sales decline for the two brands.
UK auto industry association SMMT has said that a no-deal Brexit “would have a devastating impact on the sector and the hundreds of thousands of jobs it supports.”
Delays in shipments of parts to car production plants, which are measured in minutes, could cost 50,000 pounds ($64,000) a minute in gross value added -- amounting to about 70 million pounds ($89 million) a day in a worst-case scenario, the SMMT said in a report.
Britain is scheduled to leave the EU on Oct. 31, deal or no deal.
If the Brexit terms are favorable, Ellesmere Port will share Astra production with Opel/Vauxhall's plant in Ruesselsheim, Germany, starting in 2021.
PSA announced on Thursday Ruesselsheim would add the Astra, Opel/Vauxhall’s No. 2-selling model after the Corsa small car, once it moves to PSA’s EMP2 platform.
The car is currently underpinned by a GM architecture and primarily built in Gliwice, Poland. Some variants are made in Ellesmere Port.
The new-generation Astra will have an electrified version, most likely a plug-in hybrid, which will be built in Ruesselsheim, where the Opel/Vauxhall Insignia and variants for the North American and Australian market are produced.
PSA CEO Carlos Tavares said this spring that a decision on whether electrified versions would be built at Ellesmere Port would also depend on the Brexit outcome.
Opel CEO Michael Lohscheller said that adding the Astra in Ruesselsheim would allow the plant to rise to two shifts of work “and secure the sustainable future” of the factory. The Astra was last built at the plant in from 2009 to 2015.
PSA also announced the signing of an agreement with German union IG Metall and the works council in Ruesselsheim for an early retirement program that will be offered to employees born in 1963 and earlier. The agreement provides for the hiring of 120 apprentices annually in the coming years.
PSA did not give a target for the number of workers it expected to take early retirement, but since buying Opel/Vauxhall it has put in place planned reductions of the workforce by more than 5,000, largely through voluntary actions such as buyouts.