PSA May Close Vauxhall Plant over Messy Brexit

PSA Group says it will move production of Astra and Vauxhall cars out of Ellesmere Port, England, if the U.K.’s exit from the European Union makes local production unprofitable.

The same issue would threaten the company’s van plant in Luton, England. Each of the two facilities employs more than 1,000 people.

“We have an alternative to Ellesmere Port” in southern Europe, CEO Carlos Tavares tells the Financial Times. He says he would prefer to keep Astr/Vauxhall production in the U.K., but not if doing so would result in financial losses that threaten the rest of PSA.

The Ellesmere Port factory exports 80% of its output to Europe. The plant also imports roughly 75% of the components it uses, many of them from Europe.

PSA has been warning for months that a no-deal Brexit would threaten the future of the Ellesmere Port facility. Taveres tells FT that his primary concern is higher tariffs that would raise operating costs. “We need visibility on customs,” he says. “Everything else, we’ll take care of.”

Last week the Society of Motor Manufacturers and Traders cautioned just-elected Prime Minister Boris Johnson that a no-deal Brexit would pose an “existential threat” to the British auto industry.