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Ford cuts Bridgend investment

By raccars Published

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Fears for Ford's Bridgend plant as company reduces planned investment from £181 to £100 million.

Ford has almost halved its £181 million planned investment at its Bridgend facility as it caters for changes in demand. Last year, Ford announced that it would invest £181 million in building new-generation, fuel-efficient engines, starting in 2018.

This planned funding has now been cut to £100 million, however, raising concerns regarding the company’s long-term future in the area.

Ford engine production halved

Ford says that it will now only produce half of the number of engines which were originally planned. This reduction of the planned 250,000-engine project is being blamed on changes in demand in European and other markets and the success of Ford’s alternative advanced-technology engines.

A Ford spokesperson said that the investment reduction was partly a result of falling predicted demand around the world for downsized, low-CO2 petrol engines and a growing demand for three-cylinder, 1.0-litre petrol engines, plus the overlap existing between these and other available small petrol engines.

A 'substantial commitment' from Ford

The spokesperson said that the £100 million investment still constituted ‘a substantial commitment’ from the company and projected labour requirements remained at 550 people. The manufacturer said that no redundancies were expected as a result of the investment cuts. The plant currently provides work for around 1,850 people.

Ford has admitted, however, that positions could not be guaranteed as a result of the car industry’s fluctuating nature.

'Serious questions' about future

The Unite union has expressed concerns about the reduced spending plans, claiming that the cuts raise ‘serious questions’ about the company’s commitment to Bridgend in the long-term.

Andy Richards, the secretary of Unite Wales, said that such strategic decisions were not made overnight and the union believed that Ford has a long-term plan to slowly dismantle the Bridgend operations as part of a restructuring plan for the company's global operations.

The decision to cut back on the investment was announced almost a year after the initial deal was unveiled. This was boosted by £15 million of Welsh Government funding. At the outset, the administration in Wales said that it believed that the Ford deal would be effective in safeguarding over 750 jobs for skilled workers in Wales ‘for many years’.

Ford, meanwhile, has said that the ‘flexible manufacturing capability’ at Bridgend allows it to adjust quickly to changes in market conditions, meaning that production can be increased or decreased according to changes in demand.

No link to Brexit vote

Ford has emphasised that the move to reduce investment at Bridgend has not come about as a result of the Brexit vote, despite the company previously warning that Britain leaving the EU would hit businesses to the tune of $1billion.

The chief financial officer of the company, Bob Shanks, has also warned previously that the price of new Ford cars would rise in order for the company to ‘claw back’ some of the money that it could lose as a result of foreign exchange movements in the wake of the Brexit vote.

Nonetheless, the company is insisting that the planned reduction in investment is not related to Britain’s position within the EU, indicating that the fluctuation in demand behind the decision had been detected before the Brexit vote was taken.

The Bridgend plant currently builds the 1.25-litre, 1.4-litre, 1.6-litre and 1.6 four-cylinder, Ecoboost engines which feature across Ford’s model range. Diesel engines are created at the company’s Dagenham plant.

The Ford spokesperson said that production at Bridgend remains stable, meaning that there are no plans for jobs to go, adding that it was possible to increase capacity quickly if the need arose.

In 2014, Ford invested £190 million - including a £8.9 million contribution from the UK Government - into its plant in Dagenham.

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