Bridgend Closure: What’s the UK automotive supply chain impact?

Posted on 6 Jun 2019 by Edward Pearcey

The closure of the Ford engine plant at Bridgend in Wales is the latest blow to the UK automotive sector, after recent announcements of job losses at JLR, the closure of Honda Swindon and slowing investment in the North East. Edward Pearcey examines the wider implications for the UK automotive supply chain.

According to media reports, Ford has cited "under utilisation" of the Bridgend plant when compared with other sites - image courtesy of Ford.
According to media reports, Ford has cited “under utilisation” of the plant when compared with other sites – image courtesy of Ford.

The closure of the Ford engine plant in Bridgend is certain to have a knock-on effect in the supply chain, said the UK’s Manufacturing Technologies Association (MTA) on Thursday, as union sources and Ford confirmed the shuttering of the Welsh plant by September 2020, leading to the loss of roughly 1,700 jobs.

“There’s bound to be a knock-on effect in the manufacturing supply chain, both locally and nationally,” said a spokesman for the MTA. “When a major manufacturer like this closes a plant, there are going to be consequences down the line.”

The spokesman continued that for “every job that exists within the manufacturing industry, there are almost two jobs that depend upon it within the wider economy. For that reason, this is very worrying news. I hope the figures being quoted for job losses are wrong, but the sources seem pretty consistent.”

Union anger over Bridgend

UK union representatives have reacted with anger to the news, with Unite assistant general secretary Steve Turner claiming: “Ford will be taking an economic sledgehammer to the Welsh economy in an act of gross industrial sabotage if it doesn’t urgently reverse these closure plans.”

“There are a number of factors behind this grim news – the main ones being challenging market conditions for car makers generally, a lack of a coherent industrial strategy from the UK government, and the uncertainty created by Brexit,” a Unite representative continued.

“Over the last two decades the UK car industry has experienced a renaissance of which we can all be proud,” the representative added, but now the “challenge for government, the car makers and the unions is to fight very hard to maintain the environment that made that success possible.”

Len McCluskey, Unite general secretary, added that Ford’s decision to shut the plant is a “grotesque act of economic betrayal [as] these workers and this community have remained faithful to Ford through thick and thin, but have been treated disgracefully in return.” Jeff Beck, GMB Organiser, said: “This will mean disaster for both our members in Bridgend and the community at large.”

CBI call for retraining

Meanwhile, the CBI called for the plant’s workers to be given help, with Ian Price, CBI Wales Director, arguing the workers “must be given every help in retraining, upskilling and finding new opportunities”. It welcomed Ford’s recognition of its “obligations and responsibilities” and its plan to ease the impact of the closure on the workers.

“The Welsh Government and Westminster must do all in its power to sustain manufacturing in our country, and support industries under threat from a range of challenges, from automation to a slowing global economy,” Price continued.

Bridgend closure: economic uncertainty?

Mike Hawes, chairman of the Society of Motor Manufacturers and Traders (SMMT), said the announcement was “another crushing blow for UK automotive manufacturing”, with Ford’s challenges “not unique [as] 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.”

As reported in a UK media outlet, he continued that success in this competitive global industry “starts at home, and we hope that all efforts will be made over the coming weeks to restore confidence and ensure there is long term competitiveness for this crucial sector”.

Reason for optimism

According to media reports, Ford has cited “under utilisation” of the plant when compared with other sites, and will offer workers – who have already received a letter explaining the phased job losses – the opportunity of redeployment.

“This sort of thing has happened before – Honda in Swindon – but it’s not necessarily a pattern developing,” said the MTA spokesman. “After all, car makers have their own issues and business plans. In fact, I’m not seeing too much doom and gloom in the manufacturing sector generally, and there are still investments happening.”