Ford in Bridgend - Statement

Part of the debate – in the House of Lords at 6:00 pm on 10th June 2019.

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Photo of Lord Bourne of Aberystwyth Lord Bourne of Aberystwyth The Parliamentary Under-Secretary of State for Wales, Parliamentary Under-Secretary (Housing, Communities and Local Government) 6:00 pm, 10th June 2019

My Lords, with the leave of the House, I will repeat a Statement made in the other place by my right honourable friend the Secretary of State for Wales. The Statement is as follows:

“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 gain the best outcomes. I have spoken to the company, unions and colleagues across the House. Colleagues at Jobcentre Plus are standing by to provide advice and support to those who require it in the local area, 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 fully one-third of its total engines worldwide, a fact of great pride.

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. It is very disappointing that it could be taken out of UK—in fact, out of Europe—to be manufactured in Mexico. That underlines that this is not a decision about Brexit. This 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 for the new Dragon engine falling significantly below installed capacity. Ford is restructuring its business across Europe significantly to 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 for 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 honourable friend the Business Secretary, colleagues in the Welsh Government, the trade unions and representatives since Ford’s announcement, and my honourable friend the Minister for Business and Industry and I have spoken to local Members of Parliament. Together, we will continue to engage with all stakeholders and elected representatives. While I know that the honourable Member for Bridgend cannot be in the Chamber today, I spoke with her on Friday.

We in the UK Government are committed to working with the Welsh Government and the local community to ensure that south Wales’s 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 task force to work with partners over the difficult weeks and months ahead to help 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. This builds on an existing group that has been working jointly since it was confirmed that production of the Jaguar Land Rover engine would end in 2020, and it will be important that that also builds on the Honda task force, working together to support the automotive industry.

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 to Japan, China and the USA to promote the opportunities that Wales presents for the advanced manufacturing sector and our modern industrial strategy. Later this year Aston Martin will begin production of the DBX engine, which has created 750 jobs, and last September it announced a further £50 million that will make south Wales the home of its electric vehicle range.

I and many other colleagues across this House have worked hard over the last three years to make the case for investment in Britain to investors in this country and around the world. 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, east London, where it will continue to produce diesel engines; Ford’s mobility innovation office in London, where it will develop future mobility solutions for Europe; and the Halewood transmission plant, a joint venture between Ford and Getrag 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 United Kingdom, undoubtedly recognises our international reputation for being a place to do business, with skilled and motivated staff, with access to innovation and strong determination to make those strengths even greater during the years ahead. That is the Government’s ambition, as is well-evidenced by the steps that we have most recently taken to build on the successes of our automotive sector deal. Our Advanced Propulsion Centre has awarded grants worth £800 million to more than 150 organisations across the United Kingdom. Just last month my honourable friend the Minister for Business and Industry announced a further £28 million of support to further enhance our UK Battery Industrialisation Centre in order to give an investment of over £100 million in a world-leading facility, enabling industry and academia to put the United Kingdom at the forefront of bringing battery technologies from the lab into the next generation of vehicles to drive 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 United Kingdom continues to be one of the most competitive locations in the world for automotive and other advanced manufacturing.

While the announcement of this consultation by Ford is a disappointing blow, the Government’s bold mission to put the United Kingdom at the forefront of the design and manufacturing of zero-emission vehicles presents significant new opportunities for the United Kingdom. This includes new industries and ventures that will be well suited to the skills and expertise of those dedicated workers at Ford and its suppliers. I remain committed to ensuring that Bridgend and other parts of Wales benefit from this work. In this way, we will continue to work with the Welsh Government and our very many partners across the industry as we seize the opportunities for Britain to provide great jobs and careers for hundreds of thousands of people across our country during the years ahead. I commend this Statement to the House”.

My Lords, that concludes the Statement.