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Nick Reilly voices his hopes and fears for Vauxhall

Vauxhall's chairman and managing director Nick Reilly is carrying out a meet-the-press campaign in order to outline the company's plans for the future and reflect on the turbulent events of the last two months.

Below are his views on the main issues affecting Vauxhall, from Luton and Ellesmere Port to the single currency, unofficial imports and Vauxhall's presence at this year's London Motor Show.

The London Motor Show
“Vauxhall will be there. There is a place for a show in this country every year and if we haven't made a formal annoucement on our attendance it's because we haven't finished discussing it.
A lot of our customers go there and as a big British manufacturer I think we ought to be at a British show. We also have an exciting product range and I think you need to see the breadth of the range to appreciate it.”

Single European Currency
“I want to see this country adopt the euro. But I recognise there is a right time to do, not just be part of the single currency for the sake of it. There is not the inflation gaps there used to be across Europe and the economic criteria for entry could be met reasonably quickly by this country.
“Some would say the value of sterling needs to drop another 10%. But we've said if it dropped to three deutschmarks or below we could live with it.
“We should have a referendum on the issue, but we should adopt the euro as soon as possible.”

The end of car production at Luton
“In 1998 we took the decision to replace the current Vectra (built at Luton) and at that time its position in the market was improving, but more slowly. It continued to drop as competition from premium marques entering its sector aggressively and people downsizing or moving to MPVs.
“Throughout 2000 we had been bringing our Vectra sales' forecasts down and knew we had to reduce Luton to a single shift, we thought temporarily. Then after another reappraisal realised we would be leaving it on a single shift. That's a very inefficient way to run a car plant so began to consider shifting production to Antwerp.

Ellesmere Port
“A week before the announcement on ending car production in Luton I said that since we were looking at moving Vectra production to a plant that also makes Astra (Antwerp) then we should look at Ellesmere Port as well. Antwerp had been the first choice because it had been a flex plant (able to build more than one model).
“The decision to end car production at Luton was inevitable. It was my suggestion to look at Ellesmere Port.
“Ellesmere Port will now have two models and its becoming a flex plant means you can plan much more consistent utilisation of capacity.

Vauxhall's future in the UK

“Some people think the end of car production at Luton is the precursor to Vauxhall getting out of the UK. Those who say that don't know our status in the UK or the size of our operation.
“We are re-structuring and will be a bit smaller. But we will have the broadest range of cars of any manufacturer built in the UK

Strike action at Luton
“The ballot on strike action started last week and ends this week. We should find out the result after the weekend. But I don't think there's an appetite for a strike.
“I hope there isn't a strike because we want to transfer 1,200 jobs from car production at Luton to IBC. We're just starting that process and strike action would mean union non-cooperation. That could mean lost sales and therefore job losses.”

New car prices and the 'Rip-Off Britain' campaign
“Some prices have come down, particularly list prices, but the exchange rate has also dropped. If the pound drops too low we will be accused of being cheapest in Europe, which we were once.
“The cut in list prices and reduction in the pound's strength means that the import market is consolidating in order to survive. The number of our cars coming from Europe as unofficial imports is none.
“Consumers are realising that it's not worth going overseas and they're starting to come back into our dealerships. Our dealers are telling us that there is much more interest in the dealerships and sales are building.

Vauxhall's profitability
“We lost money in the second half of last year and it's going to be sometime before we get back into strong profitability. Pressure is up on our costs and down on price, making it difficult to improve the situation.

GM's Daewoo buyout negotiations
“We're still talking to Daewoo. We want a foothold in the Korean market.”

Dotcoms
“Not many people have bought cars using our retail website, but we've only had a limited range on offer and haven't opened it up to employees so it's too early to judge it. You cannot criticise us for being first and we're there when the online market expands.
“We've learned a lot from the operation and in particular what customers want in order to feel confident in buying online, namely full servicing backup, on-line finance and demonstration drives.”

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