Stellantis is reviewing options for its Ellesmere Port car factory in England including closing the plant if it cannot reach a deal with the British government on new investments.
The automaker is considering revamping the factory that employs about 1,000 people for production of full-electric cars, according to a person familiar with the matter. The move would reflect the UK's planned combustion-engine ban and its push to build up green industries.
For the overhaul to go through, Stellantis is seeking financial incentives and commitments on post-Brexit trade of auto parts, including batteries, said the person, who asked not to be named because the talks are private.
The plant builds the Astra compact car for Opel and Vauxhall. Its future has emerged as an early test case for the UK's carmaking prospects after the Brexit trade agreement reached in late December.
Stellantis CEO Carlos Tavares froze spending due to uncertainty related to the UK's departure from the European Union. He also raised concerns last month about Brexit-related costs and bureaucracy, as well as Prime Minister Boris Johnson’s 2030 ban of cars powered by gasoline and diesel engines.
Stellantis was formed in January from the merger of Fiat Chrysler Automobiles and PSA Group, which bought Opel and Vauxhall from General Motors in 2017.
Stellantis hopes to reach a binding agreement on Ellesmere Port with the UK in the near future, Michael Lohscheller, who heads the group’s Opel and Vauxhall unit, told Bloomberg News.
"At this stage these discussions are productive but not conclusive," Lohscheller said. While a lack of government support may require closing the factory, the carmaker expects authorities to "behave in the interest of the UK economy," he said.
Lohscheller declined to comment on future production plans for the factory. "We would disclose this in due time, but first we need the UK government support to make it happen," he said.
