Chip Shortage Blamed For Looming Job Losses At Vauxhall

The ongoing shortage of semiconductors has resulted in British car brand Vauxhall (owned by Stellantis) announcing job losses.

The car maker said hundreds of jobs are at risk at the van plant of Luton, the traditional home of the brand, due to a global shortage of microchips.

The BBC reported saw a letter sent to staff at the Luton works, which said more than 200 jobs could go at that site which produces the Vivaro van.

Job losses

Vauxhall reportedly said it is consulting with staff and unions over a temporary reduction of shifts from three to two.

The letter to staff reportedly warned of “a reorganisation programme, which might result in a number of redundancies”.

The BBC said the letter cited the “knock on effects” of the pandemic, specifically the global semiconductor chip shortage.

The head of Vauxhall Motors in the UK, managing director, Paul Willcox, recently warned that chip shortage impacting the car industry is likely to continue for the rest of the year.

He said the industry was facing a “problem” for the next two or three months.

It should be noted that the Vauxhall factories in Ellesmere Port and Luton have already been disrupted at different times because of the chip shortages.

But according to the BBC, Vauxhall said this week it had concluded the nightshift “is no longer viable” and while it had looked at restricting recruitment, overtime and agency staff, it “currently appears that it will, regrettably, be necessary to reduce staffing levels”.

It is proposing the number of production positions be reduced from 990 to 751.

“As with all vehicle manufacturers globally, the semiconductor component shortage is impacting our production sites,” a Vauxhall spokesman was quoted as saying. “Therefore, we are entering a consultation period with our employees and union partners for the Luton plant to temporarily reduce the current three shifts to two.”

“We will do everything in our power to mitigate or prevent some of these job losses,” said Andy Faughnan, of the Unite union. “There are options we want to explore with the company. I wrote to them yesterday regarding some of these options and hopefully we’ll be able to save some of the jobs that are at risk of redundancy.”

Car industry

Meanwhile parent group Stellantis, whose brands include Citroën, Fiat, Opel, Peugeot and Vauxhall, recently warned it was extending production halts at a number of its factories in Europe because of the ongoing chip shortage.

Prior to that Toyota revealed worldwide vehicle production would be slashed by 40 percent in September.

The car industry as a whole has been hit very hard by the chip shortage, and matters have not been helped as many car makers tended to hold small stockpiles of computer chips, and operate a ‘just-in-time’ sourcing operation for key components.

This meant that during the first lockdown car makers scaled back their car production thinking no one would be purchasing vehicles during the global lockdown.

But demand soon sprang back and when the car makers began to ramp up car production again, they discovered that supplies of semiconductors had been snapped up by other industries that were also experiencing a sales boom.

Forrester Research warned earlier this year that it expects chip supply issues to extend through next year and into 2023.