Coronavirus: Vauxhall boss says reopening of car showrooms is vital for industry

May 21, 2020

The government should allow car showrooms to reopen from Monday or risk production lines standing idle and thousands of workers remaining on furlough, Vauxhall's boss has told Sky News.

Stephen Norman called on ministers to lift the shutdown so that Vauxhall can resume production at its Ellesmere Port plant, which directly employs 1,100 people producing the Astra.

Vauxhall's comments come as the wider industry warns that the continued closure of showrooms is costing the Treasury £61m a day in lost tax revenue and the price of furloughing the majority of 590,000 people who work in the car retail sector.

The Society of Motor Manufacturers and Traders wants all 4,900 new car showrooms to reopen urgently, claiming that every day they are closed costs £20m in VAT and vehicle excise duty.

The SMMT estimates the cost of furloughing staff at £41m a day.

Production has been shut down since 16 March, and Mr Norman said it will not resume unless the company is confident it can generate demand through its dealership network.

Toyota and Jaguar Land Rover have also stopped production at their plants producing cars primarily for domestic and European retail markets that have ground to a halt.

Nissan, whose car factory in Sunderland is the largest in the UK, said it would begin a "phased resumption" of vehicle production from 8 June.

Vauxhall's van plant at Luton resumed production this week, as did Ford and Toyota engine plants, and JLR's Solihull factory, which produces cars for export to China - the first country to experience lockdown and the first to emerge from it.

In Britain, Downing Street has indicated that showrooms may be permitted to open from 1 June, when phase two of the lockdown easing is scheduled to begin as long as certain conditions are met.

Sky News was given access to Vauxhall's Ellesmere Port factory in Cheshire to see the extensive preparations in place to allow workers to return safely.

These will include compulsory wearing of goggles, gloves and face masks for everyone on site.

But Mr Norman, Vauxhall's boss, said that despite the prime minister's call for companies that can operate to return to business, they would not make cars they are unable to sell.

"There is one thing that we're missing, that other markets on the continent benefit from, and that's the ability to open car dealerships," he said.

"So it really is important now that the UK government allows retail dealerships to open for sales, so we can develop orders to build the vehicles in the plant that you've been visiting today.

"Nobody in the modern industry builds vehicles in the hope of finding a customer, you build a vehicle for a customer, and it's absolutely vital that the United Kingdom, the four nations, develop customer orders so we can get Ellesmere Port back into production as soon as possible."

Currently showrooms are closed under the government shutdown of "non-essential" retail.

Vauxhall believes they can be reopened safely as many dealerships are large spaces, often with outdoor areas.

There are 4,900 new car showrooms in the UK and automotive retail employs 590,000 people, the bulk of them currently furloughed.

The entire car retail sector, including after-sale servicing, generates turnover of more than £200bn.

Mr Norman said the continued showroom closure is illogical given garden centres are open, and estate agents have been allowed to resume conducting viewings in people's homes.

"By allowing, for example, estate agents to open, which are relatively confined spaces, we have a little bit of difficulty in understanding why retail car showrooms, which are much bigger places, cannot reopen, and if necessary, we can have them open simply upon appointment," he said.

"What we are asking is for the UK government now to allow us to reopen at the very latest from Monday, and not have to wait until the month of June.

"That really is vital for the UK motor industry, not just for Vauxhall."

Vauxhall has been working on safety procedures to cope with the threat of COVID-19 since lockdown began and contributed to the government guidelines for safe working that were published last week.

Every worker will be required to monitor and record their temperature for 14 days before returning to work, and have their temperature taken on entering the site.

They will be issued with two masks for each shift, as well as gloves and goggles that must be worn at all times.

Access to changing rooms, toilets and rest areas will be restricted to ensure physical distancing is maintained, and two-metre indicators have been placed on production lines and work areas.

On the main general assembly production line, where more than 600 people are employed, individual work stations will be cleaned for five minutes every hour.

Workers operating face-to-face across the line who may come closer than two metres will wear visors for extra protection.

Deliveries will also be strictly monitored.

Lorry drivers will not be allowed to leave their cabs without PPE, any paperwork will be left for at least three hours before it is touched, and forklift trucks will be disinfected several times during every shift.

The closure of Vauxhall's plant has also affected hundreds of workers in its supply chain.

Adient, which makes seats for the Astra as well as several other UK manufacturers, ceased production when Ellesmere Port shut down and furloughed around 100 staff.

Plant manager John Wood said they will only come back when Vauxhall resumes.

"We are an integral part of Vauxhall and so we can't do anything to start until they start, we're completely dependent on them," he said.

"If they're running, we run, if they stop, we stop, so we've stopped at the moment."

Mr Norman predicted that if sales and production can resume soon the car industry could bounce back quickly from the shock caused by COVID-19.

"We don't see any major issue with the volume of orders that will come back in once car showrooms and van showrooms reopen, and the sooner we can do that as soon as we can bring people off furlough and stand on our own two feet."

On reopening of showrooms as the lockdown eases, a spokesman for the prime minister said: "That would form part of step two and it's an issue that we are certainly very alive to.

"We have to move forward with extreme caution and not do anything that would put at risk the sacrifice of the British public that would increase the spread."

A spokesperson for the department of business, energy and industrial strategy said: "The reopening of non-essential retail like car showrooms should begin in a phased manner from 1 June, subject to the scientific evidence.

"We have published clear guidance to ensure workplaces can open in a safe way when the time is right.

"Currently, car showrooms can continue to sell cars remotely and deliver cars, as long as they follow guidance from Public Health England."

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