FEAR AND UN­CER­TAINTY AT THE FORD FAC­TORY?

Glamorgan Gazette - - Front Page -

‘While Brexit is a ma­jor is­sue for the car in­dus­try, I’m not sure it’s the main fac­tor in this in­stance’ Unite as­sis­tant general sec­re­tary Tony Burke

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 car­maker, 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 sec- re­tary 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 pos­si­bil- ity 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 in­dus­try-wide.

“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 un- der­line 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.”

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