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Sanjoy Sen: The Government and Stellantis. ‘Picking winners’ is rarely a popular concept among Tories but it’s often a reality.

Sanjoy Sen is a chemical engineer in North Sea oil. He contested Alyn & Deeside in the 2019 general election.

The Government has been in “productive” discussions with Vauxhall’s new owner, Stellantis, over the future of the Ellesmere Port Astra plant and its 1,000-strong workforce. 

Three options are on the table: plod on building petrol cars until the 2030 government ban, close the whole place down or re-invent it as a long-term electric vehicle hub. The last one is evidently the most attractive but Stellantis is clear that it comes subject to government support. But are the fate of the factory and the fate of the Vauxhall brand one and the same thing? 

What is Stellantis, anyway? 

Back in 2014, Italian auto-giant Fiat acquired America’s Chrysler. And in 2017, General Motors off-loaded its European division (Vauxhall-Opel) onto France’s PSA Group (Peugeot-Citroen). That whole lot, comprising some 14 mostly over-lapping, loss-making brands, came together as Stellantis in 2021. MBA students will be poring over the internal politics and corporate culture clashes for years to come.  

Worse still, Stellantis is wildly over-represented in Europe but is miles behind in Asia. And its mainstream brands are under pressure from all directions: prestige players (BMW, Mercedes-Benz) are rolling out compact competitors while low-cost manufacturers (Dacia, Skoda) are fast raising their game. Then there are the externalities facing all auto-makers, from anti-car city mayors to debt-laden Generation Z preferring Uber to ownership

Stellantis does have one ace up its sleeve, though. Governments worldwide fret over redundancies, both in terms of the economy and the ballot box fall-out. Little wonder CEO Carlos Tavares can do the rounds drumming up taxpayer support globally. 

Government to the rescue (as usual) 

Brexit critics have been quick to highlight the reassurances offered to Nissan and the support demanded by Stellantis. But state backing is hardly new in the car industry. Germany recently offered up a billion Euros to secure the new Tesla factory over its EU competitors (sorry, partners). France already holds a stake in Stellantis with Italy set to follow suit. Even the Americans aren’t averse to a bail-out, rescuing both Chrysler and GM after they filed for Chapter 11 bankruptcy in 2009. 

The UK, of course, has plenty of experience here. Successive governments backed everything from DeLorean to British Leyland before finally losing patience. Even Margaret Thatcher, not a noted market interventionist, incentivised Nissan to come to Sunderland, resulting in a huge success.  

Tavares describes the UK decision to bring forward the petrol car sale ban to 2030 as “brutal”. In reality, the shift to hybrids and “pure electric” is inevitable – but Stellantis brands have been slower to transition than their rivals. “Picking winners” is rarely a popular concept among Conservatives but it’s often a reality. Kwasi Kwarteng needs to be confident that the Stellantis electric plan for Ellesmere Port looks long-term credible before committing taxpayer money. 

What might become of the Vauxhall brand?  

While the future of the factory might be secured, the Vauxhall brand itself could be a different story. In these Thunbergian times, car manufacturers are frantically ditching a century of petrol-based brand awareness and creating all-new, futuristic identities.

The Stellantis portfolio needs urgent pruning with even Chrysler under threat. Although its market share has long been slipping, a ruthless axing of the Vauxhall name wouldn’t be go down well in the UK. But a well-planned transition into a modern electric identity isn’t just achievable – it’s downright essential for success.  

A decade ago, former owner GM had high hopes for their Volt hybrid; a typical suburbanite could re-charge on their driveway, enjoy an all-electric commute and forget any range anxiety thanks to the back-up petrol engine.

Instead, it became a textbook example of marketing failure. Badged as a dowdy Chevrolet, it proved too radical (and expensive) for traditional buyers – yet too old-fashioned (and conformist) for super-trendy early adapters. The Volt came over here as the Vauxhall Ampera and suffered a similar fate despite being crowned 2012 European Car of the Year. Forgive the pun but they just didn’t plug it properly. Sorry. 

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