Decision soon on Vauxhall plant at Ellesmere Port

Press reports on both sides of the Atlantic suggest that General Motors (GM) is close to a decision about factory closures in Europe.

Two plants are in the firing line: Bochum in Germany and Ellesmere Port in Cheshire. The latest rumours are that Bochum will close (indeed it should have been axed as part of GM's restructuring plan in 2009, but German politics intervened), but Ellesmere Port is also thought to be at risk. GM needs to radically cut capacity in Europe, by up to 20%, to get to profitability.

One possibility apparently being discussed within GM is that Opels will be made in emerging markets and shipped to Europe. It would be possible to make the cars at Chevrolet plants in Korea and Mexico, for example. That plan would infuriate the unions, who want GM to do exactly the opposite – move some Chevrolet production from Korea to Europe.

It would be very harsh on Ellesmere Port if it were to close. It is one of the most productive plants GM has and it is also relatively low-cost compared to other European plants thanks to the weak pound. There would be a lot of finger pointing at GM: if it had closed the completely uncompetitive Bochum plant in the first round of restructuring, it would now be in a far stronger position.

However, any plant is unlikely to close before 2014, as GM agreed in 2010 with the unions that there would be no more closures until that date.

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