PSA says to cut about 400 jobs at Vauxhall's Ellesmere Port

A sign for a car dealership is displayed near Vauxhall's plant in Luton, Britain, March 6, 2017. REUTERS/Neil Hall

PARIS (Reuters) - French carmaker PSA PEUP.PA on Friday said it would cut about 400 jobs at Vauxhall's Ellesmere Port in Britain by the end of the year to improve the production facility's competitiveness.

PSA acquired the Opel and Vauxhall brands from General Motors Co GM.N in August, helping the carmaker leapfrog French rival Renault SA RENA.PA to become Europe's second-ranked carmaker by sales.

“Facing challenging European market conditions and a declining passenger car market, Vauxhall needs to adjust production volumes at its Ellesmere Port production facility to the current level of demand and to improve its performance, in order to protect its future,” a PSA spokesman told Reuters.

The spokesman said the 400 job cuts - which amount to about a quarter of the facility’s staff - would be carried out via a voluntary redundancy plan.

This and a move towards a single-shift operation will be discussed with employees representatives over a 45-day period.

PSA is committed to the Opel Astra plant at Ellesmere Port, the spokesman added, while pointing that current manufacturing costs there were “significantly higher” than those of the benchmark plants of the PSA Group in France.

PSA’s Chief Executive Carlos Tavares had said last month that it was hard to decide upon the group’s strategy for Vauxhall given lack of clarity over Britain’s plans to leave the European Union.

The spokesman on Friday said PSA would be in a position to consider future investments once it has visibility on Britain’s future trading relationship with the EU and once the plant’s competitiveness has been addressed.

Reporting by Gilles Guillaume; Writing by Ingrid Melander; Editing by Jonathan Oatis