Ford workers devastated as Bridgend factory closure confirmed - business live

Graeme Wearden

from Economics | The Guardian on 2019-06-06 14:21 (#4GM06)

Rolling coverage of the latest economic and financial news, as workers in Bridgend gather to hear the future of Ford's engine plant

4.38pm BST

More local reaction:

Important announcement from @BridgendFord #bridgend #ford pic.twitter.com/81CTLUML5M

3.21pm BST

The IMF has also warned that America's recovery from the financial crisis has not been shared fairly.

The increasingly polarised US economy has meant that a record-breaking period of growth has been accompanied by falling life expectancy, high levels of poverty and stagnant living standards for average Americans, the International Monetary Fund has said.

In its annual health check on the world's biggest economy, the IMF highlighted a range of "troubling" social indicators marring a decade-long expansion which in July will be the longest in the country's history.

3.17pm BST

Just in: The International Monetary Fund has hiked its growth forecasts for the US economy.

It now expects growth of 2.6% this year...but the bad news is that growth drops to 2%. And if the trade war with China worsens, growth could be rather weaker.

@IMFNews says US economy expected to grow slightly faster this year than projected in April -- 2.6% vs prev 2.3% -- but this is overshadowed by "material risks" including damage from the China trade conflict. 2020 slows to 2%

2.58pm BST

This is what Ford's decision means to workers:

"I've got a family, I've got a mortgage...and my future has just been taken away from me'

I spoke to this Bridgend Ford worker minutes after he'd heard news of the plant's closure. @Channel4News pic.twitter.com/6bG0LsvlYU

2.57pm BST

Meanwhile in Vilnius, the European Central Bank has extended its pledge to keep interest rates at their current record low.

The ECB now won't hike borrowing costs above zero until the middle of 2020, as it struggles with low growth and weak inflation.

'Minibots' are either money and then they are illegal or they are debt and then the stock of debt goes up. I don't think there is a third possibility.

Mario Draghi: minibots is either money (illegal) or debt.

No third possibility.

Market evaluation is not so positive.#ECB

2.27pm BST

Ford workers at Bridgend have been sent home early after learning that their factory will close next year.

"It's devastating. Everyone's got mortgages to pay and families to support.

"I expected a little more time to get things sorted.

Cars streaming out of Ford in Bridgend. Workers sent home early after getting the news that their jobs, after Sept 2020, will be gone. V bleak scene. pic.twitter.com/EYFlkDzsTW

"The writing has been on the wall for a long time. We knew when the Sigma engine finished there was no replacement. We knew when the AJ engine finished there was no replacement. The predicted volumes for new Dragon engine were 250,000, then 125,000, then the last thing we had was for 70,000."

"I just don't know what I'm going to do now. I sort of packed everything up and came here from Southampton when we stopped making Transit and now this."

1.53pm BST

The Society of Motor Manufacturers and Traders (SMMT), the industry body, has hinted that Brexit is a factor behind Bridgend's closure.

SMMT chairman Mike Hawes points to the 'economic uncertainty' in the UK as one factor (and we all know the principle cause of that uncertainty).

Today's announcement is another crushing blow for UK automotive manufacturing and, especially, the staff and their families in and around Bridgend. Ford's challenges are not unique: economic uncertainty at home and abroad, technological change and global trade issues are stressing markets and forcing companies to review operations and make difficult decisions.

Success in this fiercely competitive global industry, however, starts at home and we hope that all efforts will be made over the coming weeks to restore confidence, bolster demand and ensure there is long term competitiveness for this crucial sector."

1.38pm BST

Ford is holding a conference call with journalists now, to explain the closure of the Bridgend site.

Is Brexit a factor? European president Stewart Rowley insists the closure has nothing to do with Brexit, saying that Ford wouldn't have taken a different decision if Brexit wasn't happening.

1.12pm BST

The Federation of Small Business fears that the Bridgend closure will have a devastating impact on the region's economy, as well as Ford workers and their families.

Ben Cottam, head of external affairs at FSB Wales, explains:

"For 40 years, Ford has been part of the economic landscape of Wales and has a long-established, embedded and innovative supply chain of smaller businesses in Wales and beyond. UK and Welsh Governments now need to move quickly and, as a priority, work with individual businesses and business organisations to gauge the potential impact and determine what support will be needed to help shore up the activity of these businesses and, if necessary, help them diversify or seek new customers.

"The dynamism of the plant's employees and the supply chain are a huge asset to Wales which must not be lost. Now is a time for decisive leadership and we want to see real and demonstrable partnership and shared determination between Welsh and UK Governments to ensure that asset is not lost. FSB stands ready to lend its support to that effort.

1.11pm BST

Ford says it will offer a "comprehensive plan" to support workers losing their job at its Bridgend engine factory.

The car marker says:

This includes helping employees with redeployment opportunities to other Ford sites in the U.K. and assisting with domestic relocation where possible, or supporting them to find new employers or pursue new opportunities, such as creating their own businesses or training for new careers.

12.58pm BST

Ford don't mention Brexit in the statement announcing Bridgend's closure.

Instead, they single out the loss of the contract to supply JLR with engines, and the failure to find more buyers for its new 1.5 litre offering.

Factors behind the proposed closure of Bridgend include significant underutilisation of the plant, driven by the impending end of engine production for Jaguar Land Rover, the cessation of the previous generation Ford GTDi 1.5-litre engine, and reduced global demand for the new generation Ford GTDi and Pfi 1.5-litre engine.

At expected volumes, the plant also faces a cost disadvantage compared with other Ford facilities building the same engine. Significant efforts to identify new opportunities have not been successful.

12.51pm BST

Ford's president of Europe, Stuart Rowley, has insisted that the company is still committed to the UK - despite deciding to shut Bridgend.

"Creating a strong and sustainable Ford business in Europe requires us to make some difficult decisions, including the need to scale our global engine manufacturing footprint to best serve our future vehicle portfolio.

"We are committed to the U.K.; however, changing customer demand and cost disadvantages, plus an absence of additional engine models for Bridgend going forward make the plant economically unsustainable in the years ahead."

"As a major employer in the U.K. for more than a century, we know that closing Bridgend would be difficult for many of our employees.

We recognise the effects it would have on their families and the communities where they live and, as a responsible employer, we are proposing a plan that would help to ease the impact."

12.43pm BST

Ford says it plans to shut Bridgend as part of a 'business redesign' to create a more efficient Europe-wide operation.

It plans to stop making its "new-generation" 1.5-litre engine in February 2020 (I think this is the new Ecoboost engine used in the Fiesta ST and Focus).

12.36pm BST

NEWSFLASH: Ford has confirmed that it plans to close the Bridgend engine plant by late 2020, as feared.

More to follow....

12.34pm BST

Renault may not have given up on the other auto news of the day - the collapse of its proposed merger with Fiat-Chrysler (FCA).

The French carmaker has just issued a statement, which notably speaks in the present tense about the deal (even though Fiat walked away briskly overnight).

We are gratified by the constructive approach of Nissan and wish to thank FCA for their efforts and the Renault's Board of Directors for its continued confidence.

We view the opportunity as timely, having compelling industrial logic and great financial merit, and which would result in a European based global auto powerhouse.

12.16pm BST

Over in parliament, MPs have clashed over the Bridgend closure - and the extend to which Brexit is to blame.

PA has the details:

Trade minister Graham Stuart said the automotive industry is in "massive global flux" and trying to link every decision to Brexit is to lead people astray".

He was answering a question in the Commons from Labour's Geraint Davies (Swansea West), whose father worked at the Welsh Office and had convinced the car firm to move to Bridgend.

My father David Davies at the Welsh Office got Ford to create its Bridgend plant in the 70s but it's now closing due to Brexit. People who voted to Leave did not vote to leave their jobs. They have the right to have the final say in a #PublicVote pic.twitter.com/JYiIv0HYPX

11.38am BST

The Unite union has now pledged to fight the closure of Ford's engine plant at Bridgend "with all its might".

Unite general secretary Len McCluskey has also accused the US carmaker of treating its workers "disgracefully":

"Ford's decision to shut its Bridgend engine plant in 2020 is a grotesque act of economic betrayal.

"These workers and this community have stayed faithful to Ford, as have UK customers - this is still Ford's largest European market - through thick and thin, but have been treated disgracefully in return by this company.

11.30am BST

Here's the latest on Bridgend, from our Jasper Jolly:

Ford will close its Bridgend engine plant by September 2020 with a loss of 1,700 jobs.

Workers at the plant were informed of the decision on Thursday morning, according to sources with knowledge of the announcement.

11.29am BST

Parliament's Treasury committee have also just weighed in on the Woodford crisis, urging the company to stop charging management fees on its now-frozen equity income fund.

Nicky Morgan MP, Chair of the Treasury Committee, said:

"Investors in the Woodford Fund have been locked out of accessing their cash. Yet it has been reported that Mr Woodford is taking in nearly 100,000 in management fees a day.

"The suspension of trading has provided Mr Woodford with some breathing room to fix his fund; he should afford his investors the same space and waive the fund's fees while the fund is suspended.

11.18am BST

The governor of the Bank of England has issued a stern warning to the asset management sector, just days after Britain's most famous stock picker was plunged into a crisis.

Over half of investment funds have a structural mismatch between the frequency with which they offer redemptions and the time it would take them to liquidate their assets.

Under stress they may need to fire sell assets, magnifying market adjustments and triggering further redemptions - a vicious feedback loop that can ultimately disrupt market functioning.

We have recently seen analogous situations in the UK within some niche managers and smaller markets, such as property Real Estate Investment Trusts (REITs).

The complications would be much greater if a major asset class like emerging market economy debt were to freeze up.

As investors reel from the Woodford fund gating...BoE's Carney warns of risks in global asset management sector due to funds which "promise liquidity...despite investing in potentially illiquid underlying assets"

Interesting from Governor Carney as we see this happening to Woodford Funds "Over half of investment funds have a structural mismatch between the frequency with which they offer redemptions and the time it would take them to liquidate their assets" #BoE

10.51am BST

This is turning into a very bad day for job cuts.

My colleague Kalyeena Makortoff has learned that TSB bank is cutting 124 jobs, as part of an efficiency drive at its head office and branches.

Exclusive: We've got numbers on TSB job cuts

Restructuring will impact 366 bank staff (facing consultation) & result in 124 job losses. That's based on an email sent to staff by union Accord, seen by the Guardian

TSB "doesn't recognise" the numbers but won't divulged any others

The Accord email says: "This is the first time that TSB has made changes on this scale" but assured it will be managed under a job security agreement with the bank

"This includes a commitment to avoid compulsory redundancies wherever possible," the union said.

10.20am BST

My colleague Jasper Jolly has also heard from sources that Ford's Bridgend plant is to close by September 2020.

That's a heavy blow to the area, but particularly the 1,700 workers at the site and their families, who are getting the news today.

10.05am BST

Union sources have told Sky News that the Bridgend plant is to close in 15 months time, in September 2020.

Still nothing official from Ford yet.

Sky News understands carmaker Ford will close its plant in Bridgend in South Wales in September 2020 according to union sources

9.51am BST

Hearing workers at Ford Bridgend will be sent home this morning when company confirms plant closure. 1500 jobs to go and end of an era.

9.40am BST

Former Welsh Government leader Carwyn Jones, who now represents Bridgend in the Welsh Assembly, fears the threat of a no-deal Brexit may have forced Ford's hand.

He told the Press Association:

"This has all been very sudden. There was no warning about this at all. It seems to me that any decision, whatever that decision is, would have been taken very recently.

From my perspective I want to know what's going on as to with the workers and want to know a reason for the decision, and to work with Welsh government to see what we can do to help the workers here.

9.33am BST

There's dispute about how much blame should be assigned to Brexit for Bridgend's woes.

Reuters points out that car exports would suffer if there was more friction at the UK border:

Ford is making cuts in several markets to turn around loss-making operations but has also repeatedly warned the British government that it needs free trade to be maintained with the European Union after Brexit, the terms of which remain unclear....

Ford's British-built engines, which are shipped for fitting in vehicles in Germany, Turkey, the United States and elsewhere, could face delays and extra costs if Britain leaves the EU without securing a deal with the European Union.

Brexit may not be the only reason for this disastrous decision. Or even the main one. But does any Brexiter want to tell me that it isn't a factor in the loss of 1500 jobs in S. Wales? https://t.co/PsHrDeS361

@Ford to close Bridgend engine plant, says ITV News. Not a surprise if correct. No investment has gone in to replace JLR contract which ends next year & Brexit uncertainty doesn't exactly help https://t.co/cL5UT7uACP

9.19am BST

Bloomberg's Lionel Laurent suggests the French government moved too slowly on the Fiat deal:

French state capitalism in 3 acts:
1) Fiat-Renault is an excellent deal for France and Europe. We're all for it!
2) Fiat-Renault is a threat to French jobs and factories. We're thinking it through.
3) ...Hey, where'd Fiat go?

9.10am BST

Here's our news story on the end of the Fiat-Renault merger talks:

8.53am BST

Adam Price, leader of Wales's Plaid Cymru, has blasted Ford's decision to (we fear) shut the Bridgend engine plant.

Price says the move would be "one of the worst acts of industrial vandalism seen in the UK for decades". He's also unhappy that the US company is making the move on D-Day, when people should be celebrating co-operation and solidarity.

This is an act of crass insensitivity by Ford.. not the actions of a responsibly mature company. This is cowboy capitalism at its worst.

I don't think in any sense that this is a done deal.

"Don't throw workers on scrapheap" @Plaid_Cymru leader's message to @10DowningStreet @WelshGovernment ahead of @ford announcement on #Bridgend plant closure - more investment in future tech of manufacturing.
Warns of Europe wide industrial action in solidarity.@skynews #Sunrise

8.24am BST

Ford workers in Bridgend have been arriving at work, ready to learn their plant's fate.

Sad day for hundreds of workers at Ford in Bridgend as Ford tells them of plans to close the engine plant. It's expected production will finish towards the end of 2020 after 42 years on the site @itvnews

As we revelled yesterday staff are due to be formally told of plans this morning with the official announcement expected around 1230. #Bridgend

8.18am BST

Renault shares have plunged by over 7% at the start of trading in Paris, after Fiat-Chrysler ended its courtship.

Fiat shares have also taken a hit in Milan, down 3.5%.

European equity movers this morning:
Peugeot (UG FP) +0.9%
Nexi (NEXI IM) +0.7%
Renault (RNO FP) -7.6%
Fiat Chrysler (FCA IM) -3.5%
Prysmian (PSM IM) -1.6%
Credit Agricole (ACA FP) -1.3%
Orange (ORA FP) -1.1%

8.17am BST

France's finance minister has blamed Nissan, Renault's Japanese partner, for the collapse of talks with Fiat-Chrysler.

Bruno Le Maire said France was "open" to the merger idea, but wouldn't proceed without hearing more from Nissan.

"An agreement had been reached on three of the four conditions. What remained to be obtained was the explicit support of Nissan."

8.07am BST

The blame game has begun over the collapse of the deal to create the world's third-biggest carmaker.

Fiat-Chrysler is clear that Parisian politicians are to blame, telling its shareholders that "the political conditions in France do not currently exist for such a combination to proceed successfully."

The French official said France wanted to delay a vote until Tuesday to give more time to discuss it with Renault's alliance partner Nissan, and said Fiat Chrysler put "massive pressure" to quickly take the offer or leave it.

7.55am BST

Another jobs blow: Britain's largest insurer, Aviva, has just announced 1,800 jobs across its worldwide operations.

Reducing Aviva's costs is essential to remain competitive and this means tough decisions and job losses which I do not take lightly.

We will do all we can to minimise redundancies and support our people through this.

7.49am BST

Unions and politicians are very alarmed about the prospect of Ford's Bridgend plant closing.

Here's the GMB's Mike Payne, speaking on the BBC:

"We've known for quite a while that unless there was going to be investment in this plant, this plant was at risk.

"Unite will be meeting Ford first thing tomorrow morning and will comment further once the details of any announcement are known. Our priority is our members' jobs, the communities and livelihoods in the supply chain that Ford Bridgend supports."

"This is worrying news, first and foremost for Ford employees and their families who are left unsure as to their futures, but also for the jobs across the supply chain and the impact on the local economy in Bridgend.

7.39am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

The British car industry is facing a series of difficulties including a steep fall in demand for diesel vehicles and falling sales in China, previously a key growth market. At the same time, Brexit uncertainty has cast a pall over the industry, with the threat of tariffs on cars and parts travelling to and from the UK.

It has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully.

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