Page last updated at 23:01 GMT, Thursday, 28 May 2009 00:01 UK

Luton waits for Vauxhall news

By Simon Atkinson
Business reporter, BBC News, Luton

Luton job centre
There are fears unemployment could surge in Luton if Vauxhall closes

As he doles out hearty full English breakfasts, Joe Manzullo has one ear on the banter between construction workers he is serving, and the other on the news bulletin coming from the radio in the corner.

His Sicilian Cafe is just a few hundred yards from IBC Vehicles on the outskirts of Luton - one of two Vauxhall factories in the UK.

Joe Manzullo
Business is not great at the moment, and the bills keep coming in, even when the customers don't
Joe Manzullo
Cafe owner

And with huge questions over the van-makers' future - Mr Manzullo has plenty of reasons to be interested in who is going to buy Vauxhall's parent company, General Motors in Europe.

Not only does his business rely on the factory's workers to coming in to buy his fry-ups, sandwiches and mugs of strong tea.

But he also rents out a house to an IBC employee - income that he says helps him get by during quiet weeks at the cafe.

"Business is not great at the moment, and the bills keep coming in, even when the customers don't.

"Losing a few customers might cost £20 or £30 a day, but that all adds up and can be the difference between whether I take a wage or not."

'Worrying'

IBC employs about 1,500 people in Luton while Vauxhall has a further 1,000 in head office and GM's finance division.

Thousands of others work in the supply chain.

Unions worry that whoever takes over Vauxhall will cut jobs in Luton and at the Ellesmere Port factory - rather than from GM's Opel business in Europe - even though the government says it has commitments from potential buyers, Fiat and Magna, that production would remain in the UK.

Mr Manzullo says that if IBC closed, it would be "very worrying, not just for us, but for Luton as a whole".

Cars being driven past the GM factory in Luton
GM makes vans in Luton now

Before buying the cafe, 24 years ago, he spent nine years as a panel beater for Vauxhall, at the car-making plant which shut in 2002 a closure that he says, "killed Luton".

That now-cleared site - where 28,000 people once worked producing Vectras, Cavaliers and Bedford trucks - is directly opposite the cafe.

But plans to build offices, flats and a hotel have been delayed after the credit crunch engulfed the banks which were funding the development.

The closure of the plant was a huge shock when it was announced in 2000, Mr Manzullo recalls.

"I was worried then for the cafe, but most of the lads who lost their jobs went out the next day and found new work, so my business stayed steady.

"But they were good times, and getting a job was relatively easy. Now, it just isn't like that."

Government role

With unemployment in Luton standing at about 4.7%, the battle for work is nothing new for the thousands of men and women looking for jobs in the town.

Dunun Bronn
If people don't have jobs, they haven't got money to pay their mortgage or to spend in the shops
Dunun Brown
Jobseeker

Dozens of people were gathered outside Luton's job centre on Thursday, waiting for its graffiti-covered shutters to be opened.

Among them, Dunun Brown says he had been looking for work for six months, having previously worked in factories.

Without a wage he says he has been unable to get to see family in the Caribbean and worries about the impact of further job losses in the town.

"There're no job around as it is, so if Vauxhall closed it would be a worry for Luton," he told the BBC.

"The government needs to do more to keep it open. If people don't have jobs, they haven't got money to pay their mortgage or to spend in the shops."

'Confidence issue'

Also anxious about their jobs are those working in Vauxhall's dealership network which employ 23,000 people - more than four times the number working in Luton and Ellesmere Port.

Car dealers worldwide have suffered from flagging sales one of the reasons for General Motors' woes that have led them to the edge of bankruptcy.

Vauxhall dealership in Luton
Vauxhall dealerships employ about 23,000 people

And these problems are being compounded for Vauxhall dealerships, with concerns that would-be customers may be worried about buying a product when they feel there may be no service in the future.

A local dealer says he is detecting a sense of worry in his customers.

Nigel Gray, managing director at Motorbodies, a Vauxhall dealership in the shadow of the factory says he is "sure" that will not happen, but admits it is a "confidence issue".

"Confidence is a big thing in any purchasing decision and we need to get that confidence back as quickly as possible," Mr Gray adds.

But Luton is no longer as dependent on the car industry as it once was, says Colin Chick, head of environment and regeneration at Luton Borough Council.

'Symbolic'

The firm is still "an important intrinsic part of Luton, the last part of vehicle manufacturing", he adds.

Vauxhall jobs are valuable to the town, mainly because they offer relatively well-paid jobs for locals who are not highly skilled or qualified, he says.

"It's symbolic of our car-making history and if it was to go it would be a very sad day, but Luton would have to get on and reinvent itself as it always has in the past."

Colin Chick

Luton was a byword for Vauxhall and car-making but we are not a one horse town anymore

Colin Chick
Head of environment and regeneration, Luton Borough Council

But hi-tech firms including BAE Systems and AstraZeneca now have a presence here - while much of the newer employment is linked to the airport and around aviation, and the big employers now include Easyjet and Monarch Airlines.

Hundreds of millions of pounds are being spent on schools to improve education in the town in a bid to try and ensure locals have a chance of getting skilled, well-paid work.

"Luton was a byword for Vauxhall and for car-making but we are not a one horse town any more," Mr Chick says.

"What we need to do, and what we are working on is to ensure that the young people of Luton can access those jobs."



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