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Ford to shut Welsh plant with loss of 1,700 jobs

Business Finance

AFP  |  London 

Ford will shut its engine plant in Wales next year, costing about 1,700 jobs, the US auto giant announced Thursday in a further blow to Britain's embattled car sector struggling with Brexit uncertainty and a global race to meet rising demand for electric vehicles.

The head of Ford's Europe division, Stuart Rowley, said in a company statement that "changing customer demand and cost disadvantages" had contributed to making the Bridgend facility in south Wales "economically unsustainable in the years ahead" and that it would shut in late 2020.

Ford insisted that the US group remained "committed to the UK, where it continues to be the passenger and commercial vehicle sales leader".

Len McCluskey, general secretary of Britain's biggest union Unite, called the announcement "a grotesque act of economic betrayal".

He called upon the British government and devolved Welsh assembly to help fight the closure and "prevent yet another grave injury to UK manufacturing".

The is a further blow to the British car sector amid heightened uncertainty over the UK's departure from the European Union. It comes also as sales of diesel cars plummet with consumers increasingly switching to greener electric vehicles.

In recent months, Honda announced plans to shut its plant in central England in 2021, while fellow Japanese car-maker Nissan reversed a decision to build its new X-Trail vehicle at its facility in the northeast.

Jaguar Land Rover, owned by India's Tata Motors, is also shedding jobs in Britain.

The job cuts announced Thursday come on top of Ford's announcement last month to axe 7,000 jobs worldwide -- 10 percent of its global salaried workforce -- as part of a reorganisation plan.

Ford said it would take a hit of about $650 million (577 million euros) from the Welsh shutdown.

The US auto giant has operated the plant in Bridgend, west of Cardiff, for decades and is one of the region's major employers.

The closure is also set to impact many companies that supply goods and services to the facility.

"We're hugely shocked by today's announcement, it's a real hammer blow for the Welsh economy and the community," said Jeff Beck, regional organiser for the GMB union.

"Regardless of today's announcement, GMB will continue to work with Ford, our sister unions and the Welsh government to find a solution to the issue and mitigate the effects of this devastating "

Beck said the was made worse coming in the same week that US President Donald Trump was in Britain talking up a future post-Brexit trade deal between the two countries.

"When the plant closes, the new line is likely to be produced in Mexico by an American company," the union leader added.

"So much for the special relationship, Mr Trump." Ford has another engine plant in Dagenham, southeast England, and a site that makes transmissions in Liverpool in the northwest.

Meanwhile Unite leader McCluskey, a key ally of leftist Labour Party leader Jeremy Corbyn, blamed both the company and the British government for treating its workers "abysmally".

"They could do so because the fact remains that it is cheaper, easier and quicker to sack our workers than those in our competitor countries," he said.

Carwyn Jones, Welsh Assembly Member for Bridgend and a former leader of the devolved Welsh government, told Britain's Press Association the layoff plan was "very sudden".

"There was no warning about this at all," he said.

"I want to know what's going on... and want to know a reason for the decision.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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First Published: Thu, June 06 2019. 18:50 IST