Cable warns Vauxhall could be 'first Brexit major casualty'

Credit: David Cheskin / PA

Concerns about the future of Vauxhall? We've been here before.

In 2012 Vince Cable - then Business Secretary - persuaded General Motors to keep the Ellesmere Port factory going.

But tonight he told ITV News that the government and the Unite union are "very right to be worried" about the future of both Ellesmere and Luton, which together employ 4,500 people.

If Peugeot seals a deal to takeover General Motors's European business, costs will be cut and Cable believes that the case to build cars in Britain will be hard to make.

"The big difference now is we are leaving the EU. Vauxhall cars in Britain, most of the production goes to the Single Market, most of the imported components come from Europe. Frankly if you're a French owner of a company in a country which is leaving the EU it's going to be a no-brainier", he told ITV News.

Cable suggests that Vauxhall may be the "first Brexit major casualty". Is he right to link the company's fortunes to the referendum?

Concerns about future of GM's British car factories pre-date the referendum. The workforce at Ellesmere Port is incredibly efficient but the Astras they assemble are not "Made in Britain" in the truest sense. 75% of the parts are imported.

My understanding is the slump in the pound since the referendum has made the Vauxhall operation loss-making.

The GM supply chain stretches across the Single Market, which the British government has said it will leave. Tariffs, taxes and quota would cause further havoc.

PSA and GM have factories all over Europe. Part of the attraction of a tie-up is the prospect of being able to save money.

The President of General Motors, Dan Ammann flew into London this morning to meet the business minister, Greg Clark. Afterwards Clark said he was "reassured by General Motor's build on the success of the British operations rather than rationalise them".

But doubts linger.Clark headed straight for the Eurostar and meetings in Paris with both the Peugeot board and France's industry minister.

The economics is important but so too is politics.

The French government owns a 13% stake in Peugeot. It's unlikely to wave through a deal lead to job losses in France.

It's election year in Germany too, where GM Europe has two factories. This could get messy.