Groupe PSA, which acquired the Opel Vauxhall European operation from General Motors last year, has announced a £170 million investment in the factory to increase the number of vans off the production line from 60,000 to 100,000 a year.
Chairman Carlos Tavares described the announcement as “a major milestone for the future of the Luton plant”. The investment will also create 450 new jobs.
The investment in Luton is driven through a performance plan negotiated between the Unite trade union and the Luton plant, combined with its recognised know-how in the manufacture of light commercial vehicles and the flexibility of its existing paint shop.
Unite general secretary Len McCluskey said the announcement will secure van production in Luton for the next ten years. He added: "This is a very welcome investment in Luton by PSA and a deserving tribute to a dedicated workforce. It will steady nerves at the plant after years of uncertainty."
Unite members at Luton are to vote on the new propoisals, including a new pay deal, in the next few weeks.
Groupe PSA has praised the “responsible social dialogue with the Unite union guaranteeing production flexibility” and the support of the UK government and Luton Borough Council, despite the uncertainty of Brexit.
The government has welcomed the announcement. Business Secretary Greg Clark said: “Today’s decision is a vote of confidence in Vauxhall’s high skilled workforce and the UK’s world leading automotive sector.
"This investment in upgrading the production platform will safeguard and grow jobs, ensuring the future of the Luton plant well into the next decade and help ensure the plant is well positioned for future Vauxhall models to be made in the UK.”
As the European LCV market leader, Groupe PSA is already the European market leader in light commercial vehicles but intends to strengthen its market share in this segment in Europe and accelerate its development in the other regions.
The increase in manufacturing capacity in the compact vans segment is also taking place at its Hordain facility in France.
The investment in the Luton plant will enhance its manufacturing processes. In 2017, the plant produced 60,000 Opel/Vauxhall Vivaros.
Opel/Vauxhall chief executive Michael Lohscheller said: “This excellent news for Luton is also a clear demonstration that our PACE! Plan is being executed across all European countries.
“It is also a clear recognition of the skilled people who have customer satisfaction at the core of their priorities.
“As we have often stated, we have our future in our own hands and we need to unleash the full potential of the employees.”
Groupe PSA chairman Carlos Tavares added: “Performance is the trigger for sustainability and I would like to thank all stakeholders involved and underline the open mindset of our union partners, as well as that of the UK government.
"This is a major milestone for the future of the Luton plant and a key enabler to serve our ambitions in the commercial vehicle market, guaranteeing customers the best offering in this segment.”
Unite is calling for a similar investment into Vauxhall’s other UK manufacturing plant at Ellesmere Port on Merseyside.
Mr McCluskey said: "Vauxhall is a highly regarded British brand with over a century of motor manufactuiring with a strong and loyal UK customer following.
"Add to this the excellent productivity at our plants and the case for PSA to build a lonmg-term home in the UK is a compelling one."
