Vauxhall Owner Shuts Luton Factory Amid ‘Stringent’ Government Net Zero Targets

A new electric van at Vauxhall's plant in Ellesmere Port, Cheshire, England, on July 6, 2021. Peter Byrne/PA Wire

Vauxhall owner Stellantis has announced plans to close the van-making factory in Luton, with the company saying the decision came amid the government’s “stringent” green targets.

Stellantis said on Tuesday that the plant, which makes light commercial vehicles and employs 1,120 people, will be closed in April 2025 as part of a move to consolidate its operations for making electric vehicles at their Ellesmere Port site in Cheshire.

The company said it launched a consultation with employees and union partners. If plans are approved, Stellantis will create hundreds of new permanent jobs in Cheshire for those staff who want to relocate.

It is set to invest £50 million into the Ellesmere Port site to create an all-electric hub, after already investing £100 million three years ago when it began its shift away from petrol and diesel vehicles. The Cheshire plant makes electric light commercial vehicles for several of Stellantis’s brands, including Vauxhall, Citroën, Peugeot, and Fiat.

The firm said it will offer job support for all employees affected, and “will work with local government and local employers to identify new employment opportunities within the Luton area for Stellantis employees who might be impacted by this proposal if it goes ahead.”

Zero Emissions Vehicle Mandates

The announcement came a week after auto manufacturers met with ministers to discuss sales quotas for electric vehicles.

Manufacturers were concerned that net zero mandates would put jobs at car factories at risk, with industry specialists also raising the issue of a lack of a national charging infrastructure.

Ford has already said it would cut 800 jobs across the country amid pressure from “lower-than-expected” consumer demand for their electric cars.

Currently, the zero-emissions vehicle (Zev) mandate requires that 22 percent of all new car sales be electric in 2024, rising to 80 percent by 2030 and 100 percent by 2035. The original deadline for the complete end of new petrol and diesel vehicle sales was 2030, but was extended by former prime minister Rishi Sunak.

However, the new Labour government had committed to reversing the previous Conservative administration’s decision.

In July, the Society of Motor Manufacturers and Traders (SMMT) said that many car manufacturers would “struggle to comply” if Labour reinstated the 2030 deadline.

‘Devastate’ Car Industry

The SMMT provided a further update on the state of the electric car sector on Tuesday, warning that the current pace of enforced transition to electric vehicles would have a “devastating” impact on the industry and the viability of jobs.

The group’s analysis found that weak market demand combined with the “need to fulfil ever-rising sales quotas” will cost the industry £6 billion this year.

They also cited the high price of raw materials and energy prices, as well as geopolitical tensions and economic uncertainty.

On Wednesday, Business Secretary Jonathan Reynolds made a statement in the House of Commons on the planned closure of the Vauxhall plant, saying the announcement was a “dark day for Luton.”

Reynolds said that since it was made aware of the plans in July, it had done everything it could to prevent the closure, but ultimately it was a business decision Stellantis made in response to wider challenges in the sector.

The minister said he has asked the company to “urgently share their full plans with us and to work with the government so that every single worker who is impacted receives the support they deserve.”

Addressing wider issues within the sector, Reynolds announced a consultation “on our manifesto commitment to end the sales of new purely petrol and diesel cars by 2030, but we will use that consultation to engage with industry on the previous government’s Zev transition mandate and the flexibilities contained within it.”

Decarbonisation Through Deindustrialisation

The proposed closure of the Luton Vauxhall plant comes amid other closures and restructures in the coal, steel, and oil industries across the UK, as businesses try to adapt to the government’s commitment to meet net zero emissions by 2050.

On Sept. 30, Ratcliffe-on-Soar power station near Nottingham, the UK’s last coal-fired power station, was shut down.

Petroineos confirmed on Sept. 12 that Grangemouth, Scotland’s only oil refinery, would cease operations in 2025 and would transition to a finished fuels import terminal and distribution hub. The refinery’s owner had said last year that the site faced “significant challenges due to global market pressures and the energy transition.”

That same week, the government announced it had struck a deal with Tata Steel to secure 5,000 jobs while the Port Talbot plant in Wales moves to an electric arc system for producing steel.

However, 2,800 jobs are still at risk at the plant.

Gary Smith, leader of the GMB union, criticised the Port Talbot plans, saying: “We really have to stop this decarbonisation through de-industrialisation. Serving up P45s to working-class people, hollowing out working-class communities, is not the way to decarbonise this country.”

PA Media contributed to this report.