LUTON - Nick Reilly, chairman and managing director of Vauxhall Motors Ltd., and chairman of IBC Vehicles, today announced a series of investment and plant changes to GM's manufacturing profile in the UK.

"These moves are a significant announcement for our manufacturing operations here in the UK," said Mr. Reilly. "The investment is necessary to prepare us for new products and to improve further our productivity and cost competitiveness. "When all the changes to our production operations are in place, we will be offering our UK customers the widest range ever of UK produced vehicles. "These investments give us the potential to increase shifts, if the market demands, at both the Ellesmere Port and Luton plants. IBC is planned to move to three shifts in mid 2001. "While nothing is ever guaranteed, the greater productivity achieved by these changes obviously helps the prospect of maintaining employment in the future. "We have worked hard to control our costs in recent years and this investment is both a reward for those efforts and a boost to further cost improvements. "The introduction of the new van, the reorganisation of the Vectra plant ahead of the next generation car, and the transfer of the Frontera, will provide us all with a tremendous challenge over the next 18 months - one to which we all look forward. "Despite the very high level of the pound which continues to put a substantial strain on our manufacturing business, the UK continues to be a good place to manufacture and this optimism is helped by the continuing commitment and developing skills of our workforce," continued Mr. Reilly.

There will be no impact on the supply of the Frontera, Vectra or Astra to the marketplace while the changes are made at all three plants.

IBC to become dedicated van plant:
The IBC plant in Luton will cease production of the Frontera at the end of this year and will concentrate on the all-new medium van range for Europe. This van, developed in conjunction with Renault, will be launched in spring 2001, and further details will be released later this year. The new van will bring around 500 new jobs to IBC's production facility in Luton over the next 18 months. The total investment for the new van at IBC will reach around £130 million.

It is forecast that in excess of 80,000 vehicles will be built initially at the Luton plant for sale across Europe by both Vauxhall/Opel and Renault. The new van range has been developed with Renault as part of an agreement with General Motors Europe signed in 1996. This agreement has already strengthened the positions of both companies in the European medium and heavy van market.

The new van, which has a weight range of 2.5 to 2.8 tonnes gross vehicle weight, will reinforce GM's commitment to the whole van market across Europe.

Frontera to move to Ellesmere Port
Production of the Vauxhall/Opel Frontera, currently built at IBC Vehicles in Luton, will transfer to Vauxhall's Ellesmere Port Plant to be built alongside the Vauxhall/Opel Astra. Vauxhall will invest £27 million in the Ellesmere Port site to assist the move of the Frontera. Sales of the Frontera will reach nearly 30,000 this year.

The move of Frontera to the Ellesmere Port plant will be made possible by using manpower and capacity from the current third shift of Astra which was due to finish at the end of this year. The plant secured this investment against international competition. The first Fronteras will be produced at Ellesmere Port in the spring of 2001.

Luton Plant investment
Currently manufacturing is spread over four floors, and this investment will allow Luton to build cars over two floors using short, flexible conveyors, rather than the current single conveyor. The significant changes to the plant layout will help the plant to remain internationally competitive.

This £32 million investment will also see improved working conditions for everyone in the plant, along with significant increases in efficiency.

Vauxhall Engineering Centre
Support for all the projects will come from the new Vauxhall Engineering Centre, based at Millbrook and Opel's International Technical Development Centre in
Germany. The Renault iDVU Engineering Centre in Villiers Saint Fredric in France is also supporting the new van project.

Vauxhall announced a £5 million investment in the Vauxhall Engineering Centre last year.

(May 8, 2000)