(Title Image: Sky News)
Following strong rumours Wednesday evening, it was officially confirmed yesterday that the Bridgend Ford engine plant will close on 25th September 2020 in the single biggest blow to the local economy in decades.
Around 1,700 jobs will go, phased over the coming months – though the impact on the wider supply chain will spread the pain beyond Bridgend and probably beyond Wales.
A Perfect Storm
Many people will immediately point to Brexit – and it certainly doesn’t help matters – but it’s just one of a set of problems which made significant job losses or closure inevitable.
- The number of new car sales is in decline (leading to similar announcements by Jaguar Land Rover and Honda), with increased global competition for customers.
- Several engine production lines at the Bridgend plant were coming to the end. Within the next 20 years or so diesel and petrol engines will be phased out in favour of electric and hydrogen. Bridgend makes neither and electric vehicles don’t need engines.
- Leaked documents from March 2017 showed plans for the workforce to be cut to as few as 600 by 2021 once current engine lines came to an end. They also highlighted worries about productivity levels at the Bridgend plant and a poor working relationship between unions and managers.
- Brexit will have played a part in this; almost all of the engines produced in Bridgend are exported to the EU for vehicle assembly. Under a No Deal Brexit, tariffs and additional customs rules would increase the costs involved. Donald Trump’s protectionism won’t have helped either. While Ford Europe will make the decision, they’re still an American company and it’s not beyond the realms of possibility that Ford will eventually pull out of Europe completely and move production to the US and Mexico.
Objectively, Brexit is probably one of the straws that broke the camel’s back rather than the sole driving force behind Ford’s decision – and I say that as a Remainer.
While the slow down in car sales may be down to lifestyle changes (such as using public transport more often) and cost-of-living problems amongst the young, it could just as equally be a sign that we’re on the brink of another recession.
I’d be surprised if there wasn’t a debate on this in the Senedd next week – and I’ll cover that, of course and we will have a clearer picture on what the Welsh Government intends to do. Naturally, politicians have expressed their disappointment and are pledging to support the workforce – a standard response to news like this, with all the associated cliches of vox pops at the factory gates and politicians standing in front of the giant Ford sign etc. etc.
Ford outlined what they intend to do in a letter handed to workers following the announcement. In fairness, it does sound (on paper) to be fairly comprehensive. But that’s the very least they can do after putting workers through the mincer for several years, while they have a track record in Wales of failing to meet their obligations. Believe it when you see it.
Trade unions are understandably angry and are pledging to fight to prevent closure (as are some politicians) – I’m expecting the possibility of strike action to become more than just a threat.
But Bridgend is a very matter-of-fact cynical place and if unions and politicians offer false hope without a serious plan backing up those bold promises, the backlash will be fierce. The Brexit Party are already sniffing around and it’s often easier to get angry about something and apportioning blame than coming up with a solution to a difficult problem.
Saying you can keep the plant open as it currently is or there’s a magic wand you can wave to make all the bad news go away will be rightly met with derision. These jobs – amongst the best paid in the area – won’t be replaced like-for-like in the same numbers. Ever. Everyone living in Bridgend has long known that.
This is clearly really bad news, but people claiming this will have a devastating impact on the town itself are either just parroting the standard cliche or haven’t been here in a while. The town centre has been in a precarious position even whilst Ford was at its peak, while there’s a reason Bridgend is described as “the home of CGI” on the railway station signs. The economy is a bit more diverse even if Ford is/was a big part of that.
While everyone in Bridgend probably knows someone or is a friend of a friend of someone with ties to the plant , it’s worth remembering they’re a regional employer too; I’ve seen a figure bandied about that 20% of the workforce live in Rhondda Cynon Taf, for example.
If the Cardiff City Region wants to prove its worth, now’s the time.
What Happens Next?
There’s still a little over a year left for some reprieve or rescue plan – but, as said, it’s not worth giving people false hope.
The much-talked-about Ineos 4×4 tie-up could retain some workers, but I don’t think Ford would’ve taken the decision to close the plant if they thought it was going to happen.
It’s unclear whether other major car companies will be eager to take over the plant because the problems facing Ford are applicable across the entire sector. That’s where Brexit is really going to screw things up. No company worth their salt will want to take on something as big as this when they don’t know what trade conditions they might face.
That said, the plant does have a lot going for it.
The factory itself is massive and can be easily converted to different uses; it has a rail yard; it’s partly self-powered via a wind turbine; it comes with a highly-skilled workforce and is conveniently located with ready access to a supply chain. I don’t think there’ll be a shortage of interested parties, but it would still require serious backing and detailed plans.
If the future is electric and hydrogen, then the obvious answer would be to redouble efforts to try to secure electric and hydrogen vehicle manufacturing at the site, ideally alongside a heavy focus on research and development too and ideally making vehicles from start to finish, not just parts. Aston Martin down the road is an example, but it’s one thing to make bespoke vehicles and another to try and make mass market vehicles when electric vehicles still aren’t a “thing” yet.
Also, the days of labour-intensive big box manufacturing are coming to an end. It’ll gradually be replaced by automated production lines on fewer sites where manual and mechanical skills are less important than programming, design and creative on-the-spot thinking. Bridgend’s just another casualty of it. How decision-makers respond to that is more important than trying to save the plant as it is.
While there’s clearly a need to secure a future for the site, the most radical idea would be – wait for it, hold on to your seats – actually investing money in local businesses; the businesses that are going to stick around and may have to pick up the slack by employing ex-Ford workers and apprentices.
They’re not sexy companies. They won’t provide photo-ops for politicians. They won’t be employing more than 1,000 people in a massive factory or have a FTSE or Dow Jones listing. But they would probably be far more grateful for the support than the so-called anchor companies Wales has chucked so many hundreds of millions of pounds at.
In our brave new post-Brexit world we might not have any other choice but to properly build up and support what we have on our own doorsteps, instead of expected saviours to ride to the rescue from elsewhere.