PSA Peugeot Citroen has insisted its departure from Ryton would not weaken its commitment to Coventry.
But after the French initially gave assurances about keeping the factory initially until 2009-2010, observers could be forgiven for being a little sceptical. After the closure today the French carmaker will employ 1,000 people in Coventry at its UK HQ at Aldermoor House and its parts distribution centre in Tile Hill.
The firm is also planning to spend #50 million on the Stoke Aldermoor site, to create a new 110,000 sq ft corporate HQ building and a 60,000 sq ft technical centre and dealer training academy.
Jon Goodman, director of corporate communications, said the closure decision had not been made before this year.
He said: "The decision to close Ryton followed a strategic review in the first quarter of this year. It's nonsense to suggest the decision was taken before."
Ryton may have made tremendous improvements in productivity and "right first time" had risen from 55 per cent to 78 per cent, a performance which put it among the best Peugeot plant, but it was still the most expensive plant in the group, he said.
"We looked at the company across the globe, and Ryton was the most expensive plant in the group. Each car cost more than 415 euros more to build than at any other plant in Europe.
"It supplies the European market, which is hugely competitive and difficult. We had overcapacity and massive competition.
"When we launched the 205 there were 14 competitors; when we brought out the 206 there were 44 and when there was the 207, there were 70. It's a very tough market.
"Our half year profits were down by 50 per cent, and that position is unsustainable."
Peugeot's profitability has been hit by both the rising cost of raw materials and by legislation introduced by the European Union which regulates car emissions which alone has cost #414 million.
The expense was not just down to labour costs, but the fact most of the company's major suppliers were based in continental Europe.
The logistics of transporting everything to Ryton were very expensive.
"Even if we invested the #176 million needed to modernise the plant, it would still suffer from this disadvantage," said Mr Goodman.
Mr Goodman said the unions' plans to go down to one shift were not viable, and action had to be taken.
He said: "The decision was absolutely necessary. We were faced with a very difficult announcement and decision, and once that was taken we had to ensure we put in place the support for our employees.
"This was vital to help them overcome a difficult situation and ensure they were not facing up to the future on their own.
"We put in place an industry leading financial package, which means that nobody is leaving with less than a year's salary."
Peugeot has set aside #227 million to cover the cost of closing the plant, which in recent months has been producing 160 cars per day. Workers are receiving one and three year years salary in redundancy payments, with the average pay offs between #20,000 and #25,000. The closure of the plant was brought forward from next summer to January, and now to today .
Peugeot has also invested #5 million into job fairs, training and support schemes for the workers.
In all five fairs have been organised, said Mr Goodman, with 6,000 jobs being offered.
Perhaps this is why the union's boycott campaign against Peugeot did not really take off.
In the 11 months to the end of November, Peugeot sales stood at 136,832, 0.43 per cent up on last year, in an overall car market that was down 3.15 per cent.
Or perhaps it is the case that the Great British car buying public may care about the fate of a factory, but just not enough.
Looking ahead, Mr Goodman said he did not expect a downturn in Peugeot sales as a result of the closure.
He said: "We remain very committed to the UK, and will still have about 5,000 staff in the UK. With that commitment we will continued to bring quality cars at proper prices into the UK to match demand. You have to remember that 85 per cent of the cars registered in the UK are not built here."
While Mr Goodman acknowledged the closure would be a sad day, he was proud of what the company had achieved there. He said: "It is inevitably sad but there is also a mixture of pride. Peugeot took on a plant that was failing and invested in it and enabled it to have additional years of life."
Mr Goodman said he could not predict how the new chief executive Christian Streiff could tackle the company's problems when he takes over in February.
He added: "It is a sad day, but we have put in place the procedures to help and support people.
"This will not affect our commitment to Coventry? Absolutely not."
>> The day closure became a reality
>> French company dubbed as inflexible
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