The warning, from outgoing CBI director general Sir Digby Jones, follows a fortnight of protests by workers at sites across the Midlands including Darwin Motors Peugeot dealership in Coventry. In an interview, Sir Digby says: “Consumers like to support companies who invest in their community, which is why I think Peugeot is making a mistake.”
Evidence is widespread – Nissan enjoys greater sales penetration in the north-east, while the former Rover business always dominated in the West Midlands.
Peugeot dealer council chairman David Manchester, managing director of Charters of Aldershot, concedes that retailers in the local area might be affected, but says the closure of Ryton would not impact national sales.
“The initial announcement and negative publicity surrounding it has now passed. On a national scale I don’t think it will have any affect whatsoever, the only dealers affected could be those situated in the area around Ryton and Coventry,” he says.
“In terms of volumes I don’t think it will have any affect. People understand there is an overcapacity to build cars in Europe and most buyers don’t stick to a particular brand and don’t know where the cars are built.”
During the protests, employees handed out leaflets, which made the case for Ryton as a profitable and productive plant and urged members of the public to write to PSA Peugeot-Citroen chief executive Jean-Martin Folz to protest.
“Peugeot’s customers need to know they are buying tarnished goods,” says Des Quinn, the Transport and General Workers Union’s regional industrial organiser. “They are tarnished with the betrayal of workers by a company which is talking economics but practising greed.”
Last week union leaders met Chancellor Gordon Brown about the future of the Ryton factory. The T&GWU described the meeting as “helpful and constructive” and said the Chancellor would be talking to Peugeot management.
The unions are also working on an alternative plan that could see some form of production remain at the plant, for which the Chancellor has offered his assistance.
“We have accepted there will be some job losses with this new plan. In terms of support from the government, this meeting was definitely positive. The problem is with the French bosses,” says Quinn. He has not ruled out further industrial action.
Up to 2,300 jobs will go when the plant closes in July 2007. The announcement came 12 months after Peugeot said it was committed to Ryton until 2010.
The decision followed a detailed study which “confirmed the weaknesses for the Ryton plant – high production and logistical costs”.
According to Peugeot, every car produced at Ryton costs £287 more than anywhere else in Europe, although Professor Garel Rhys, head of the automotive centre at Cardiff University, claims his figures show Ryton is Peugeot’s third most productive plant in Western Europe, more productive than the French factories.