The owner of Vauxhall has claimed it is considering the closure of its Ellesmere Port factory unless the UK government offers financial support after extended negotiations.

An executive of Stellantis, the carmaker, on Thursday said it hoped to reach a binding agreement with the government on aid.

Michael Lohscheller, the head of Stellantis’s Opel and Vauxhall brands, said “at this stage these discussions are productive but not conclusive”, in an interview with Bloomberg News.

A final decision may not be reached by the weekend, according to a person with knowledge of the situation.

Lohscheller said he expected UK authorities to “behave in the interest of the UK economy”, but reportedly said a lack of government support may require closing the factory, a move that would put about 1,000 jobs at risk.

Stellantis was formed this year in a merger between the Italian-American carmaker Fiat Chrysler and France’s Peugeot, which has owned Vauxhall since 2017.

The latest investment decision has long loomed over the UK automotive sector as production of the current petrol and diesel Astra models nears its end. Stellantis was considering whether to build electric cars at the plant.

The company had weighed up three options for the plant: building a new version of the Vauxhall/Opel Astra, constructing another model or winding it down.

The government has been closely following the decision, which had been seen as a key test of the UK’s automotive prospects after Brexit and as the transition to electric vehicles accelerates.

Stellantis management has had talks with the UK’s business secretary three times in the past six weeks, including a meeting with Kwasi Kwarteng as recently as Monday night.

A government spokesperson said: “We are committed to ensuring the UK continues to be one of the best locations in the world for automotive manufacturing, and we are doing all we can to protect and create jobs, while securing a competitive future for the sector.

“We regularly speak with all automotive companies, including Stellantis, but do not comment on ongoing discussions.”

The Ellesmere Port plant had long been considered at risk, after Carlos Tavares, Stellantis’s chief executive, made it clear that the decision rested on the course of the Brexit deal.

The deal that was finally agreed on Christmas Eve avoided disaster for Britain’s automotive sector, securing tariff-free trade in parts and cars between the UK and EU.

In January, Tavares added further pressure on the UK government, describing the 2030 ban on pure petrol and diesel cars as “brutal” and saying that the plant’s future depended in part on government action.

Tavares masterminded the 2017 purchase of the Vauxhall and Opel brands and factories from General Motors’ perennially loss-making European division. He rapidly turned the brands around to their first profit in 20 years in 2018, after a large-scale cost-cutting plan.



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