Ford of Europe confirmed in a letter to employees that it proposes to cease production at its Bridgend Engine Plant and to close it on 25th September 2020.
In a media statement on 6thJune, Ford of Europe said: “The proposed action is a necessary step to support Ford’s global business redesign and is part of the company’s strategy to create a more efficient and focused business in Europe.”
It described the factors behind the proposed closure as including, “significant underutilisation of the plant, driven by the impending end of engine production for Jaguar Land Rover, the cessation of the previous generation Ford GTDi 1.5-litre engine, and reduced global demand for the new generation Ford GTDi and Pfi 1.5-litre engine.” It added that, at expected volumes, the plant also faces a cost disadvantage compared with other Ford facilities building the same engine.
Ford expects to cease production of the current 1.5 litre engine in February 2020, with manufacturing of engines for Jaguar Land Rover finishing in September 2020, when the Bridgend plant would close completely.
Ford expects to record pre-tax special items charges of around US$650 million in relation to the closure.
The Bridgend Engine Plant started production in 1977. It currently employs 1700 people, of whom 400, Ford says, will leave in the second half of the year under an already agreed ‘voluntary separation programme’.
Stuart Rowley, president of Ford of Europe, said in the official statement. “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 our future vehicle portfolio.” He continued: “We are committed to the U.K.; 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.”
Ford listed other actions it was taking in pursuit of its European transformation strategy. These include:
- Near-term actions to improve profitability and reduce structural costs.
- Confirming 16 new electrified vehicles for Europe, eight debuting in 2019.
- Leveraging relationships, including an alliance with Volkswagen AG, to support commercial vehicle growth.
- Voluntary employee separation programmes to reduce more than 5,000 jobs in Germany.
- Consolidating British and European Credit headquarters in Essex.
Optimisation of Ford’s European manufacturing footprint and addressing underperforming markets will also include:
- Ending C-MAX / Grand C-MAX production in Saarlouis, Germany, in June 2019.
- Shift reductions in Saarlouis and Valencia, Spain.
- Restructuring a joint venture in Russia, to focus on commercial vehicles and cease passenger vehicle production in June 2019, with the closure of two assembly and one engine plants.
- Ending production at a transmission plant in Bordeaux, in August 2019.
Responding to the announcement, the GMB Union said it was shocked by “a real hammer blow for the Welsh economy and the community in Bridgend”. The Union suggested that the new engine line would be produced in Mexico by an American company. Len McCluskey, general secretary of the Unite the Union, described the closure plan as a “grotesque act of economic betrayal” and claimed the company had consciously run down its UK operations.