WHAT NEXT FOR FACTORY WORKERS?
Brexit worries, protectionism in the United States, falling demand in China and now a plunge in sales from a key buyer in Jaguar Land Rover have once again left workers at Ford’s huge Bridgend plant fearing for their future. Bronte Howard reports...
CONCERNS for the future of the Bridgend Ford plant have increased after it was revealed hundreds of employees have been told to stay at home after a production line unexpectedly closed this week.
The Ford Engine Plant AJ assembly line, which makes the Jaguar Land Rover (JLR) AJ-V8 engine, will be closed until tomorrow. As a result, staff were told not to go in to work this week.
This has raised concerns for the future of the company, and job security for its workers.
The move is directly linked to a decision by JLR to implement a temporary shutdown at its Solihull plant after a plunge in sales.
Yesterday, JLR unveiled a £2.5bn turnaround plan that includes cost cutting after Brexit uncertainty and slowing demand in China left it nursing a hefty second-quarter loss.
Britain’s biggest car-maker, owned by Indian conglomerate Tata, booked a £90m pre-tax loss in the three months to September 30, which compares to a £385m profit in the same period last year.
One woman, who wishes to remain anonymous, said her husband – an employee at Ford Bridgend – found out about the plans to shut the line last week.
She said: “Dozens of people work on that line and have been told not to go in to work next week. It’s affecting dozens of people, people who have families and mortgages to pay.”
She said she fears redundancies, adding: “It’s creating a lot of uncertainty.”
Those affected by the closure are being paid a basic salary and Ford has confirmed staff will return to work on Monday.
A spokesman for the company said: “We have initiated five days’ downtime on one of our production lines at Bridgend Engine Plant from Monday, October 29. The production line builds engines for a third party.
“Given that we are a supplier, we are unable to comment any further.
“With regards to Bridgend more generally, Ford Bridgend Engine Plant has a long-established and successful record in the delivery of world-class engines. This month, the plant begins production on a technologically advanced fuel-efficient petrol engine, following a significant investment in an all-new state-of-the-art flexible manufacturing facility. We have no other employee-related announcements.”
While many experts agree Brexit is having a negative impact on the industry, most argue it’s just one part of the “perfect storm”.
Professor Peter Wells, from the Cardiff University Business School, said: “It’s too early to say what the industry will look like in the future. Ford in Bridgend could close, it isn’t nailed to the ground. But the people who work there are highly skilled and Ford wouldn’t want to lose them.
“Looking at the impact Brexit is having,
the UK will be worse off outside the EU. There’s a lot of uncertainty right now and nobody really knows what is going on or what is going to happen. There’s a lot that we don’t know, but we’ve got to remember that the UK is a big manufacturer and is an important part of the industry in Europe.”
Ian Price, director of CBI Wales, also said Brexit would have had an impact in the Bridgend line closure – but stressed it is important to look at the wider picture.
“It’s a combination of lots of things and it would be unfair to blame Brexit,” said Mr Price. “There has been a loss in confidence and at the moment there doesn’t appear to be a Brexit deal, but that doesn’t mean that it has had an impact on the Bridgend plant. I think there’s been a perfect storm of buying habits changing, the impact of the Brexit vote and there is less of a demand for diesel engines.”
However, while some believe the Brexit vote has played some part in the temporary lay-off, trade union Unite disagrees.
Assistant general secretary Tony Burke said: “While Brexit is certainly a major issue for the car industry, I’m not sure that it’s the main factor in this instance. The reason behind it is that JLR unexpectedly closed their Solihull plant for two weeks and this has had a direct impact on everybody down the supply chain, including Ford in Bridgend.
“Obviously Brexit is having an impact on the automobile industry, especially with the possibility of a no deal or a bad deal, but that isn’t the reason for this line closure.”
The UK Government has pledged to ban the sale of petrol and diesel vehicles by 2040, and with more people becoming concerned about the impact transport has on the environment, it’s no surprise that experts say there is a decline in demand for diesel.
Mr Price said this is one of the biggest contributing factors for this week’s line closure, and says Ford needs to invest more in hybrid and electric engines to avoid possible future job losses.
He said: “The Ford plant in Bridgend makes diesel engines and the Jaguar engine is diesel and the demand for that is down, so it isn’t unusual that it has slowed down production. At the moment people’s buying habits are changing. Fewer people are investing in vehicles and even less are wanting to buy diesel.
“Car sales have been down in the last 12 months and people who are buying new cars aren’t likely to be buying the latest diesel model. This isn’t unique to Ford, it’s industrywide.
“There hasn’t been a major investment at the Bridgend plant for a number of years, and really there needs to be more investment in electric and hybrid because that’s what more people want to invest in.”
Robin Roberts, from the Welsh Automotive Forum, added: “The slowing down in production is likely to be down to a drop in demand for diesel engines. The Government wants to ban the sale of new petrol and diesel cars from 2040, so this is likely to be having an impact on the industry.”
Along with Brexit and a decrease in demand for diesel vehicles, a third reason given by experts is that last month sale figures for JLR in China plummeted by 43% and this has had a knock-on effect on manufacturers.
China has increased its import tariffs for car and car parts for most vehicles, meaning many customers in China are putting off buying a vehicle until the tariffs are lowered.
Mr Roberts said: “Jaguar has already said they are going to move from Ford in Bridgend in 2019/2020, so it isn’t a surprise that they are slowing down production. But from what I understand there has been a huge collapse in the industry in China because of import duties and this has affected the automotive industry globally. Sales in China are down 43%, meaning there is less of a demand for LJR engines from the Bridgend plant.”
He added that if tariffs are lowered by China, demand for engines from the Bridgend plant should pick up again. In short, it’s impossible to say right now.
However, Mr Burke said if it does happen again, Ford has procedures to help mitigate the damage it will do to the factory.
A Welsh Government spokesman said: “News of a temporary shutdown of one of the lines at Bridgend Ford is obviously concerning for workers and only serves to underline the importance of a Brexit deal that delivers for our car industry. Senior officials from the Welsh Government spoke to Ford yesterday and are meeting officials from Unite, the union, today.
“We will continue to do all we can to work with Ford to ensure a bright future for the plant at Bridgend, despite the challenges of Brexit.”