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Ford in Bridgend

Part of the debate – in the House of Commons at 5:23 pm on 10th June 2019.

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Photo of Alun Cairns Alun Cairns The Secretary of State for Wales 5:23 pm, 10th June 2019

With your permission, Mr Speaker, I would like to make a statement about the future of Ford’s engine plant in Bridgend, south Wales.

On Thursday, Ford announced the start of a consultation with its unions concerning the potential closure of the Ford Bridgend engine plant in south Wales. I am not going to understate what a bitter blow this is to the 1,700 skilled and dedicated workers at Ford in Bridgend and their families, to the many more people and businesses who supply the plant, and to the town of Bridgend and the wider community. Our focus will be on working with Ford and the unions to understand the challenges and opportunities and to gain the best possible outcomes. I have spoken with the company, the unions and colleagues across the House. Colleagues at Jobcentre Plus are standing ready to provide advice and support to people, if required.

I live close by and absolutely understand the importance of this plant to the local community. The site has been worth over £3 billion to the local economy over the last 10 years. The town of Bridgend has proudly been home for 40 years to a world-class engine manufacturing facility. Ford has relied on Bridgend and Dagenham to supply one third of its total engines worldwide—a fact held with great pride by the employees.

We have known for some time that the production of the Sigma engine was coming to its natural end and that the Jaguar Land Rover contract would not be renewed, but the news that the Dragon engine may no longer be produced in the UK is disappointing, to say the least. It is very disappointing that it could be taken out of the UK and, in fact, out of Europe, to be manufactured in Mexico. That underlines that this was not a decision about Brexit. The decision was about the challenging conditions faced right across the global automotive sector.

Bridgend has been particularly impacted by the downturn in Ford’s share of the passenger vehicle market in Europe, with volumes of the new Dragon engine falling significantly below the installed capacity at the site. Ford is restructuring its business across Europe to significantly decrease structural costs and allow for investment in future electrification. To that end, it is optimising its European manufacturing footprint and reducing operations in France, Germany and Spain. Bridgend is significantly underutilised, with projections of the number of engines that it will produce falling far below what would be commercially viable in a single plant. Bridgend also faces a significant cost disadvantage compared with other Ford facilities around the world building the same engine.

I have spoken to my right hon. Friend the Business Secretary, colleagues in the Welsh Government, the trade unions and other representatives since Ford’s announcement last week. The Business Secretary and I have spoken with local Members of Parliament, too. Together, we will continue to engage with all stakeholders and elected representatives. Although Mrs Moon cannot be in the Chamber today, I spoke with her on Friday.

We in the UK Government are committed to working closely with the Welsh Government and the local community to ensure that south Wales’ justified reputation as a place of industrial excellence in manufacturing and technology is maintained and expanded. On Thursday, the Welsh Government’s Minister for Economy and Infrastructure announced the establishment of a taskforce to work with partners over the difficult weeks and months ahead to find a sustainable, long-term solution for the plant and its workforce. UK Government Departments and I will play a full and active part in that body. That builds on the existing group that has been working jointly since it was confirmed that the Jaguar Land Rover engine would end in 2020. It is important that it builds on the Honda taskforce, working together to support the automotive industry in general.

We are already looking at opportunities to attract new investment to the area. I remain optimistic that south Wales is an attractive proposition and place for industry to operate from. In fact, over the last two years, I have been in Japan, China and the USA to promote the opportunities that Wales presents for the advanced manufacturing sector and our modern industrial strategy. Last year, Aston Martin announced that it will bring the production of the DBX vehicle there, which will create 750 jobs for St Athan. Last September, it announced a further £50 million investment that will make south Wales the home of its electric vehicle range.

I and many other colleagues across the House have worked hard over the last three years to make the case for investment in Britain. Despite the devastating news for south Wales operations, Ford’s commitment to the UK will remain as a major employer of some 10,000 people, with other significant operations in the country, including Ford’s technical centre in Dunton, Essex, which is home to Ford’s European market-leading commercial vehicle business; Ford’s engine facility in Dagenham, where it will continue to produce diesel engines; Ford’s mobility innovation office in London, where it will develop future mobility solutions in Europe; and the Halewood transmission plant, producing transmissions for cars such as the Ford Fiesta.

It remains the case that Ford, as an American company with a century-long history of operating successfully in the UK, undoubtedly recognises our international reputation as a place to do business, with skilled and innovative staff, access to innovation and a strong determination to make those strengths even greater in the years ahead. This is the Government’s ambition, as is well evidenced by the steps we have most recently taken to build on the successes of our automotive sector deal.

Our Advanced Propulsion Centre has awarded grants worth more than £800 million to more than 150 organisations across the UK. Just last month, the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend Andrew Stephenson, announced a further £28 million of support to further enhance our UK Battery Industrialisation Centre, giving investment of more than £100 million in a world-leading facility to enable industry and academia to put the UK at the forefront of bringing battery technologies from the lab into the next generation of vehicles to drive on our streets. Working with industry, £80 million of investment through our driving the electric revolution programme will see support for innovation in electric motor technologies.

We are determined to ensure that the UK remains one of the most competitive locations in the world for automotive and other advanced manufacturing. The announcement of this consultation by Ford is a disappointing blow, but the Government’s bold mission to put the UK at the forefront of the design and manufacturing of zero emission vehicles presents significant new opportunities for the UK. That includes new industries and ventures that will be well suited to the skills and expertise of those dedicated workers at Ford and their suppliers. I remain committed to ensuring that Bridgend and other parts of Wales benefit from that work. We will continue to work with the Welsh Government and our many partners across the industry as we seize the opportunity for Britain to provide great jobs and careers for hundreds of thousands of people across our country in the years ahead. I commend the statement to the House.