DR JONATHAN Owens, supply chain and logistics expert at the University of Salford Business School, comments on the decision to close the Ford Bridgend engine plant and says there are many factors to the decision, including falling car sales and issues around diesel engines, among others.
Dr Owens said: “This closure will lead to the loss of 1,700 jobs, with at least a further 3,000 in the supply chain, to deliver yet another significant blow to UK car manufacturing.
“Possibly this has not been quite as a surprise as other recent UK car manufacturing industry announcements. Production at the site has been declining for a while now, which perhaps contributed somewhat to Ford’s changing direction with their original investment plans of £181m at the facility to £121m. When the original investment was first announced it was described as one of the world’s most advanced production lines embracing the latest types of robot assembly machines alongside highly skilled operators and engineers. However, by 2016 its production was halved to 125k engines a year. So, although with the new Dragon engine came into production, perhaps some noteworthy changes were already starting to appear on the horizon for the plant back in 2016.
“Also, the decline in sales for the larger engines at JLR has seen them take the work back in-house at their engine factory in Wolverhampton from 2020. Therefore, no longer outsourcing this work to Ford’s Bridgend engine factory, and subsequently further reducing production capacity from next year.
“Brexit uncertainty has played a small role as the plant has supply chains to Ford’s production facilities across Europe, and they rely on a smooth uninterrupted flow of components and engines and currently no one knows how this will happen.
“For the consumer a useful barometer is the sales of cars during the new registration period which typically accounts for a third of annual sales, overall these were down about 16,000 when compared to the previous year. The vilification of diesel continued with sales falling over 21%, petrol sales rose to just over 5.1%, however the clear winner for the consumer sales was the electric/hybrid modules rose to just fewer than 8% of sales, which accounted for 5.5% of new sales for the March 2019 registration period.
“But the main problem is that Ford have not moved quickly enough from their traditional markets. They have to speed up in getting fully into mass electric vehicles with significant competing range, especially if they want a piece of the EV market. Ford plans to release 16 fully electric vehicles within a global portfolio of 40 electrified vehicles by 2022. This is too late for Bridgend.”