Ford could make further UK workforce cuts beyond Bridgend in the event of a no-deal Brexit, according to the firm’s European president, Stuart Rowley.
The statement comes after Ford confirmed plans to close its engine plant in South Wales as part of a wide-reaching restructure of its European business. Around 1700 jobs could be lost as a result. According to a letter sent to employees, the job losses will be conducted in phases, starting from September next year.
When asked if further job losses could come in the event of a deal with the European Union not being struck, Rowley said: “Should a no-deal Brexit happen, we will need to evaluate the environment with regards to tariffs and customs issues – we’re hoping that doesn’t happen. If the business environment changes significantly, we will have to review our business plan.”
Despite this, Rowley claims that the decision on Bridgend was “nothing to do with Brexit”, stating: “If Brexit had never happened, would there be a different decision? The answer is no.”
The firm has started a consultation to close the Welsh facility, talking to unions and agreeing an “enhanced employee separation programme”.
Why Ford is closing Bridgend plant
Ford lists a number of factors for the closure of Bridgend, centring on the “significant underutilisation” of the plant’s capacity of 750,000 engines per year. The approaching end of production of the AJ-V8 engine for Jaguar Land Rover – moved to the firm’s Wolverhampton plant – and Ford’s Sigma engine is cited, alongside a reduction in global demand for the 1.5-litre three-cylinder Ecoboost motor (used in the Fiesta ST and Focus).
Production of the latter engine is proposed to end at Bridgend in February, with the supply of Jaguar engines stopping in September 2020, when Ford intends to close the plant altogether. It has set aside around £500 million for costs associated with the closure, the vast majority of which is set to be paid to employees as part of “separation and termination payments”.
“Creating a strong and sustainable Ford business in Europe requires us to make some difficult decisions, including the need to scale our global engine manufacturing footprint to best serve out future vehicle portfolio,” said Rowley.
“We are committed to the UK. However, changing customer demand and cost disadvantages, plus an absence of additional engine models for Bridgend going forward, make the plant economically unsustainable in the years ahead.”
Asked about suggestions that Ineos Automotive, an arm of one of the largest global chemical companies, may want to use the Bridgend facility to produce its 4×4, Rowley said: “I cannot comment on any individual companies. What I would say is we have considered seriously any opportunity to rescue the plant, and none of those opportunities have been viable.”
Bridgend isn’t the only place where Ford’s European restructure has had an impact. The firm recently ended production of the C-Max in Saarlouis, Germany; reduced shifts at a plant in Valencia, Spain; closed a transmission factory in Bordeaux, France; and shut three sites in Russia.
Ford will maintain its UK presence by continuing to produce diesel engines in Dagenham and transmissions in Merseyside, while the company’s thriving commercial vehicle business is based at its technical centre in Dunton, Essex.
Bridgend closure reaction
Society of Motor Manufacturers and Traders boss Mike Hawes said the closure was “another crushing blow for UK automotive manufacturing and, especially, the staff and their families in and around Bridgend”. He added: “Ford’s challenges are not unique: economic uncertainty at home and abroad, technological change and global trade issues are stressing markets and forcing companies to review operations and make difficult decisions.
“Success in this fiercely competitive global industry, however, starts at home and we hope that all efforts will be made over the coming weeks to restore confidence, bolster demand and ensure there is long-term competitiveness for this crucial sector.”
Welsh secretary Alun Cairns told the BBC that it was an “extremely worrying and uncertain time for Ford workers, their families in Bridgend and the surrounding communities”. He said that the government would “work closely with Ford, the trade unions and the Welsh government to make sure this highly valued workforce can move into new skilled employment.”
Adam Price, the leader of Plaid Cymru, said the news was a “bitter blow” to the Welsh economy, adding: “The implications of this in terms of the supply chain in terms of job losses is very, very grave indeed.”
The history of Ford Bridgend
Rumours of Bridgend’s closure have been circling for some time, with Ford previously announcing a round of redundancies. It was originally planned that 370 people would be laid off this year, with a further 620 going in 2020.
The 141,000-square-metre Bridgend plant was built in 1977, following an agreement between Ford and the Welsh Development Agency, with production starting in 1980. The plant initially built engines for the Escort.