Vauxhall owner warns of ‘dramatic consequences’ of Brexit

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The owner of Vauxhall has warned of “dramatic consequences” for its UK plants if there is a no-deal Brexit.

Speaking to the BBC, Carlos Tavares said the carmaker’s “number one” request of Brexit talks was free trade.

Mr Tavares is chief executive of PSA, which bought Vauxhall and Opel last year and has operations in Ellesmere Port and Luton.

He said: “If we don’t have free trade conditions then of course we will have to adapt”.

“That may have dramatic consequences for our operations in the UK, which of course we would like to avoid as much as possible.

“So for us the situation is crystal clear, we need free trade. That’s the number one request,” he said in an interview at the Paris Motor Show.

The PSA Group – which also owns Peugeot and Citroen – employs 3,000 people in the UK, including 1,225 at the Luton plant and 1,100 at Ellesmere Port.

Other carmakers have warned about the impact of a no-deal Brexit, as they operate a “just in time” production model.

The head of Toyota Motor Europe has said a Brexit without a deal would affect the firm’s investment decisions, and last week Toyota UK warned that a no-deal Brexit would temporarily halt output at its plant in Burnaston, near Derby.

BMW has said it will close its Mini plant in Oxford for a month following Brexit while Jaguar Land Rover has warned that a “bad” Brexit deal would threaten £80bn worth of investment plans for the UK and may force it to close factories.

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PSA said in April its next Vivaro van would be built at the Luton plant “despite Brexit uncertainties”

Mr Tavares said: “Brexit is Brexit. We did not decide it. It is something that was decided by the UK people and we respect that, but if there are consequences coming out of a no-deal situation then so be it.”

The European head of PSA, Maxime Picat has also been discussing the impact on the business if the company had to make cars separately for the UK and EU markets after Brexit.

Mr Picat told Reuters the company had been doing all it could to develop its UK business, but there were limits.

“Those limits are customs barriers and the loss of freedom of movement, for people and goods. If we get to that point, we will be obliged to take measures.

“If we suddenly have to start manufacturing for the UK in the UK, and Europe in Europe, there will necessarily be an impact on production.

“We’re not going to be dogmatic about it and there’s no question of punishing the UK. We’d take a look at our two factories, the state of our business and look for a solution. But I don’t know where that will lead us in terms of the sustainability of our sites,” Mr Picat said.

In March, Mr Tavares said the lack of clarity about Brexit undermined Ellesmere Port’s chances of getting more work after 2021.

The company has since announced investment in its Luton van-making plant, which could eventually see Peugeot and Citroen-branded vans made in the UK.