Stellantis, the parent company of Vauxhall, has announced plans to shut its Luton van factory, putting 1,100 jobs at risk. Production will be relocated to the company’s Ellesmere Port facility in Cheshire, which will receive a £50 million investment to expand its focus on electric vehicle manufacturing.

This decision ends nearly 120 years of vehicle production in Luton and reflects Stellantis’s efforts to adapt to the UK’s zero-emission vehicle (ZEV) mandate. The mandate imposes strict targets for electric vehicle sales, with penalties for manufacturers who fall short. However, industry insiders suggest the closure is also linked to Stellantis’s excess production capacity across Europe.

The Unite union, which represents many of the affected workers, has criticized the move as a “slap in the face” for Luton employees and called on the government to intervene. While some workers may be transferred to Ellesmere Port, concerns remain over the broader economic impact of the closure.

The automotive industry is facing mounting challenges as manufacturers grapple with falling demand, increasing competition, and the costly shift from internal combustion engines to electric vehicles. Recent job cuts by Ford and planned plant closures by Volkswagen underscore the strain on the sector.

The UK government has pledged to review the ZEV mandate amid criticism but is expected to maintain its long-term goal of phasing out petrol and diesel vehicles by 2030. Adjustments to short-term requirements may provide automakers with more flexibility to meet targets.

Despite the investment in Ellesmere Port, the closure of the Luton plant is a significant blow to the UK’s manufacturing base. A government spokesperson expressed concern for the affected workers and emphasized the need to maintain the country’s competitiveness in the transition to electric vehicles.