Ford Britain today received a big boost to its low carbon vehicle strategy, as the company announced £1.5bn funding partly backed by government loan guarantees.
Ford has committed £1.5billion in investment over five years for the development of new environmentally-friendly engines and vehicle technologies. The investment is supported by £360m in government loan guarantees as part of the Automotive Assistance Programme, a £2.3bn support programme for the UK automotive sector to modernise and ‘green up’ the industry.
The Government has agreed the loan guarantees subject to the approval of a £450m loan that is being considered by the European Investment bank.
Six projects at all four of Ford’s UK sites – Bridgend, Dagenham, Dunton and Southampton – will benefit from the support, which the Government says will safeguard 2,800 skilled jobs at these sites, and create new jobs as the technologies become maninstream.
The projects include further development and testing of 15 Ford Focus BEV electric vehicles, which are being tested as part of the Low Carbon Vehicle Demonstrator Programme set up last year by the Technology Strategy Board. It includes development of the Transit and Connect vans and low carbon emission diesel and petrol engines, as well as investment in production facilities for new lower carbon engines in Bridgend which was supported by the Welsh Assembly Government last year. All the component parts for the Focus BEV will be designed and manufactured at Ford Dunton.
Business Secretary Lord Mandelson, who announced the investment, said: “Today is about demonstrating a major turnaround in the UK’s capability to produce low carbon vehicle technology. I’m proud that backing Ford with this investment is also backing wider UK advanced manufacturing. The key point here is, if we did not back this programme at Ford, at Nissan in Sunderland and Vauxhall at Ellesmere Port last week, these skilled jobs would be lost, the production would go elsewhere in Europe and beyond and the automotive manufacturing base would go into severe decline.”
The Automotive Assistance Programme, which is tasked with providing loan guarantees and loans in exceptional cases, was established by the Automotive Council in 2009 in response to a paper on the future of the UK automotive sector published by the precursor to the Automotive Council, the NAIGT, chaired by ex-Ford supremo Richard Parry Jones. Joe Greenwell, chairman of Ford Britain and a member of the Council, said: Ford welcomes this positive support from the Government. It greatly assists in delivering Ford’s commitment to invest over £1.5 billion in new, affordable, volume-produced low CO2 technologies. This is good news for UK manufacturing, and good for the automotive industry.”
Investment the antidote to deficit
When asked if the UK, facing record public borrowing of £175bn in 2009/2010, could afford this investment, Lord Mandelson said: “We can’t afford not to make these investments. The biggest antidote to a deficit is growth.” He referred to the state support for a 15,000 tonne forging press at steel firm Sheffield Forgemasters, announced yesterday, saying it would make the company one of just two or three companies in the world capable of making specific nuclear components, adding “if we hadn’t done this, a Japanese company or someone else would have.”
One recommendation in the NAIGT’s May 2009 paper was for government to create a simpler and consistent tax system to incentivise consumer demand for low carbon vehicles, which have work to do to convince many people about their range capabilities and reliability. “We have already pledged grants up to £5,000 for new low carbon car purchases, but we must also support the charging infrastructure,” said the Business Secretary. “This will be driven mainly by the private sector as demand for electric cars increases, but government will keep a weather eye on this and we will be there to give targeted support to ensure the charging infrastructure is delivered. It’s crucial that this strategy is not only about engines and cars coming off the lines, but that the demand and infrastructure is there as a market driver.”
Nissan’s Sunderland plant also today announced it would manufacture Nissan’s new LEAF electric vehicle, providing a major boost to the Tyne and Wear region with the safeguarding of 2,250 jobs at the Sunderland plant and in its supply chain, and the creation of 550 new skilled engineering jobs.
The Department for Business, Innovation and Skills has invested in a steady series of initiatives over the last 18 months that support advanced manufacturing, the low carbon economy, new STEM-based skills and niche areas like composite materials, with the opening yesterday of the National Composites Centre near Bristol.
Lord Mandelson ended one interview by saying: “We have to keep our foothold in manufacturing in the future, so that future jobs will be created because of the decisions we’re taking today. We’re not just good at research, design and development in Britain, but in making things as well.”