Global demand for the Ford triple-cylinder EcoBoost petrol engine is lower than expected and driven the decision to close its production line in Bridgend next February.
He confirmed that Ford will repay about £11 M to the Welsh Government for not fulfilling its investment promise made in 2016 and the company will begin an enhanced separation programme with staff to help them relocate to other Ford facilities, to train for new jobs or start own businesses as well as cover pension and redundancy payments.
Originally it was planned to make about 250,000 Dragon EcoBoost engines annually but as the lines were being installed the company revised down to half and now it says it’s unlikely to even achieve that due to falling demand even before it was commissioned in autumn 2018.
He said the company had not played off Bridgend and Dagenham engine plants because they were making different products and the English plant’s diesel units were being hybridized for Transit and Ranger. The UK will remain major design hub for FoE, he said.
The Dragon work was anticipated to offset some of the losses from the JLR contract expiring in September 2020 but this has not happened and the accelerated reduced demand for the small EcoBoost has exacerbated the issue.
Ford has failed to secure any other use for Bridgend or bring in another investor and closure is the only way forward, but Mr Rowley would not be drawn on what will happen to the mothballed Dragon production line which cost £100M to install over two years.
Welsh Government is still hopeful of bringing the Ineos Land Rover Defender rival, the Projekt Grenadier to Brocastle estate, over the boundary fence from Ford BEP from the middle of 2020.
The closure has come out of the blue for Welsh and UK Governments but Mr Rowley would not be drawn on the reaction from the UK Government, although Wales Minister for Economy and Transport Ken Skates was clearly fuming during televised broadcasts hours after the announcement.
Welsh Government will establish a Ford Task Force, possibly under a senior international engineer, to look at rescuing investments, securing new businesses and assisting those who will lose their jobs at Bridgend.
It could also work with existing automotive businesses to expand their operations in the fields of new technology.
First Minister Mark Drakeford said of the closure:
“This news is incredibly sad for the loyal workforce at the factory, for the community of Bridgend and for those in the supply chain.
“The Welsh Government has supported the plant over many years and this decision in no way reflects on the highly skilled individuals who have given the company great service over four decades.
“The Welsh Government will do everything in its power to support those impacted by this announcement and to work with all partners to explore options for the future of the plant.”
Minister for Economy and Transport Ken Skates added, “The Ford engine plant has been a part of the fabric of Bridgend for almost four decades and my heart goes out to all those employed at the site and in the supply chain.
“This is clearly devastating news for the highly skilled workforce at the Ford Bridgend plant and the many local suppliers and communities who rely so heavily on it.
“The Welsh Government will establish a taskforce to work together with others over the coming weeks to help find a sustainable, long term solution for the plant and its workforce.”
Tim Williams, ceo of Welsh Automotive Forum went on to say, “We are devastated by the news and will work with whoever it takes to help and support those who are affected by the closure decision, and our sympathies go out to the employees and their families at this very difficult time.”
Heather Myers, CEO, South and Mid Wales Chamber of Commerce said:
“This is devastating news for Bridgend where this not only directly affects the hundreds of Ford employees, but the local supply chains, local economy and the wider community.
“Citing the fall in demand for the Dragon petrol engines as the reason, highlights how reliant our economy has become on global markets, and why International trade relations are vital to our supply chains.
“Following so close on the news of the cancelled M4 Relief Road this has been a truly distressing week for the Welsh Economy. The South Wales Chamber of Commerce will continue to work to support supply chain resilience, access to new supply chain opportunities. We will ensure the voice of business is heard and represented, to both Welsh and UK Governments, about what action is needed to ensure Wales’ continued ability to compete in a global economy.”
“It’s another sad day in a sad week for Welsh business. I feel gutted for the business community, they are already facing tough times around uncertainty and, it’s been a devastating week for a number of our communities. We now need confident action by the Welsh Government to show that they have the Welsh economy at the heart of policy.”
Unions have described the forthcoming closure as “a hammer blow” and it will slash millions of pound from local council rates and affect businesses supplying the plant and its workers right across South Wales.
Average payouts to redundant workers will be about £100,000 each in total for lost pay and pensions adjustments.