2019 07 – Parliamentary Notes

Parliament Notes

By Dick Barry

Ford in Bridgend

10 June 2019

The car industry in Britain, mostly foreign owned, is in crisis. The announcement by Ford that it intends to close its engine plant at Bridgend in South Wales, (see debate below), follows on from similar news by Honda in Swindon in the west of England and Nissan in Peterlee/Sunderland in the North East of the country. The latter will remain open but has reversed its decision  to build a new vehicle. And Jaguar Land Rover is planning to cut thousands of jobs at its plant in the Midlands.

Government ministers deny there is a direct link between the announcements and Brexit. However, motor industry executives point to the uncertainty created by the vote to leave the EU which they say has curtailed investment in the car industry and increased the prospect of switching production to mainland Europe, where it can operate freely within the customs union and single market.

The Secretary of State for Wales (Alun Cairns) 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 the hon. Member for Bridgend (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 the Member for Pendle (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.

Christina Rees (Neath) (Lab/Co-op) I thank the Secretary of State for advance sight of his statement.

Last Thursday’s news of the closure of the Ford plant in Bridgend was absolutely devastating for the exceptional workforce, their families, the town of Bridgend and the wider south Wales community. As a former Bridgend county borough councillor, I completely understand. It is absolutely devastating for the businesses in Ford’s supply chain and the tens of thousands employed in them, and it is absolutely devastating for the automotive sector, UK manufacturing and our entire economy. Ford must rethink its plans to strip away 1,700 highly skilled, quality jobs from the area, and the UK Government must do all they can to support those dedicated workers.

This news is disastrous for all concerned. The chaos caused by the Tory Government’s calamitous handling of Brexit, coupled with the Secretary of State’s continuing inability to stand up for Wales, has allowed Ford to deliver a hammer blow to the workers in Bridgend and the Welsh economy. This is a betrayal of the hard-working and loyal staff who have been committed to delivering savings in making the Bridgend plant one of the most efficient in the world.

It is clear that Ford needs urgently to reverse this treacherous decision and to stand by the highly skilled workforce in Bridgend, rather than chasing profits via cheaper markets in places such as Mexico and India. It is disgraceful that Ford no longer produces a single vehicle in the UK despite its growing market share of car sales. Companies such as Ford originally chose to locate production plants in the UK because it was renowned for its skilled workforce and seen as economically stable compared with other turbulent markets across the world, but the Government’s botched Brexit has changed this. It is causing chaos and uncertainty and undermining business confidence.

Ford is just the latest in a long list of companies, including Airbus, Nissan, Honda and Jaguar Land Rover, to halt investment, cut jobs or close plants as a direct result of this uncertainty. We know that the Tory Government offered Nissan a deal. Was Ford offered a deal? There can be no doubt that this Government’s reckless threats of no deal, accelerated by a self-indulgent leadership contest with hard-Brexit contenders, is having an impact on business decisions across the UK, not just in Wales. Yet again, this is catastrophic news for Wales—news that has come as a direct result of UK Government shortcomings where Wales is concerned and that follows their shortcomings on rail electrification, the Swansea Bay tidal lagoon and the steel industry. This is just one of a string of failures on the Secretary of State’s watch. I call on him to apply pressure on Ford to do the right thing and rethink its catastrophic plans.

I thank my hon. Friend the Member for Bridgend (Mrs Moon) for all the work that she has done to support the plant and its workforce, now and in many previous years. I also thank my hon. Friend the Member for Ogmore (Chris Elmore)—who represents the neighbouring constituency—for all that he is doing to support the many hundreds of people in the area who are being affected. I thank other Welsh Labour Members whose constituents work at Bridgend Ford and in its supply chain, and I thank the trade unions.

The automotive industry is the backbone of our manufacturing sector, supporting highly skilled, quality employment and making an enormous contribution to our economy, but its future, in Bridgend and across the UK, is in jeopardy. I call on the Secretary of State to do now what he has failed to do previously and stand up for Wales. He must speak with Cabinet colleagues to seek the financial support and stimulus which will match what has already been committed by the Welsh Government.

Alun Cairns I thank the hon. Lady for her comments, but I must express disappointment in the tone that she chose to take, which contrasted with the tone adopted by both the Welsh Government and the unions.

Earlier, the Business Secretary and I spoke to Ken Skates, the unions and many local Members of Parliament as part of a communications plan to share our ambitions and discuss the steps that we will take before the taskforce meets, hopefully later this week. Ken Skates and I will be joint vice-chairs of that taskforce and there will also be a chair from industry. That demonstrates the joint approach that we are taking, in a constructive way, recognising that this is a commercial decision made by Ford because of the change in the marketplace caused by the shift from petrol and diesel engines to electric vehicles. I commend the Welsh Government for the joint working that they have demonstrated so far, and I commend the unions for their engagement and the tone that they have adopted in the discussions.

Like many other Members, the hon. Lady pointed to Brexit. Those Members are being somewhat selective. It is right that the manufacturing sector, in particular, seeks a stable economic environment from which to export to the European market, but Ford was a strong supporter of the Prime Minister’s deal, which the Labour party chose to vote against. Whatever uncertainty exists over the Brexit negotiations, I think that the hon. Lady and other Labour Members need to accept their responsibility. They played a part in that. They have been highly selective in quoting comments and recommendations from Ford.

The hon. Lady was right to say that this is a highly efficient plant with a very skilled workforce. We will continue to work to attract investment in the site, be it from Ford—although we have not succeeded in doing that since the Jaguar Land Rover engine contract was announced—or others. We will also engage with other potential investors in the Brocastle site, which is adjacent to the Ford plant. We are in discussion with some potential investors at a mature stage, but it will be up to those organisations to make the final decision about whether to invest. We are in discussion with other ​organisations in the automotive sector that could provide exciting opportunities. We all recognise the skill and the quality of the workforce. The potential investors recognise it, which is why they are engaging so positively with us and with the Welsh Government. I also underline that Ford job losses are also taking place in Europe: there have been 5,000 job losses in Germany as well as job losses and shift changes in Spain.

In closing my response to the hon. Lady, I remind her that there are now 100,000 more manufacturing jobs in the UK economy and 13,000 more manufacturing jobs in Wales than there were in 2010.

David T. C. Davies (Monmouth) (Con) Does my right hon. Friend welcome the fact that so many politicians in Cardiff Bay and London who only last week were proclaiming climate change emergencies and competing for who could demand the fastest possible ban on petrol and diesel engines have suddenly become champions of the manufacturing of petrol and diesel engines in this country?

Alun Cairns My hon. Friend makes an important point and highlights the shift taking place in the industry from petrol and diesel engines to electric vehicles. Some manufacturers are trying to catch up with the fast-changing consumer demand, but it is absolutely right that the UK is at the forefront of this technology, which is why we are investing so much in the sector to ensure we are active in the next generation of motor vehicles.

Alan Brown (Kilmarnock and Loudoun) (SNP) I thank the Secretary of State for early sight of his statement. May I say on behalf of the SNP that our thoughts are clearly with the workers at Bridgend and those in the supply chain?

My constituency has suffered severe losses in manufacturing over the years, so I fully understand the devastating impact this can have on local communities, including the knock-on effects on shops and service providers. What supply chain impact assessment has been done as a result of the decision by Ford? What funding guarantees can be given to match Government actions, rather than just warm words?

The Secretary of State said that Brexit is not responsible for this decision, but Ford was one of the companies that warned of the dangers of a no-deal Brexit, so when will this Government rule out a no-deal Brexit to stop any further job losses in the manufacturing sector?

The Secretary of State said in his statement that Bridgend faces cost disadvantages compared with other Ford plants doing the same work. How long has this cost disadvantage issue been known about and what opportunities have the Government looked at to overcome that and to support the plant? What opportunities have been identified by the existing working group, formed in 2018, to plug the gap by the loss of the Jaguar Land Rover contract and how will the new taskforce build on that and identify the much bigger gap and challenge that needs to be overcome? What future investment will the UK Government make to ensure there are no further cost disadvantages to any companies located in this area? ​The Secretary of State also said they were already looking at opportunities for investment in the area, so can he give timescales for positive announcements on the opportunities that have been identified?

I understand why the Secretary of State gave assurances about the other Ford plant operations across the UK, but how robust are those assurances? Padding out his statement by mentioning a £28 million investment in Coventry, £800 million in UK-wide grants from the Advanced Propulsion Centre and £80 million for the electric revolution programme is of absolutely no comfort to the Bridgend workers. What we need to hear is that the right actions are being taken now, not platitudes.