LONDON -- Ford Motor Co. said it plans to close its UK engine manufacturing plant in Bridgend, Wales, in 2020, according to a disclosure filed with securities regulators on Thursday.
Ford said in the filing it would record a $650 million pre-tax charge for the plant closure in 2019. About $400 million is for employee termination cash payouts. The other $250 million will cover pension expenses, the filing said.
"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,” Ford of Europe President Stuart Rowley said in a statement released Thursday morning. “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.”
The BBC reported that union leaders from the plant had been called to the company's headquarters for a meeting on Thursday.
"Ford's decision to shut its Bridgend engine plant in 2020 is a grotesque act of economic betrayal," said Len McCluskey, head of Unite, Britain's biggest trade union.
"We will resist this closure with all our might, and call upon the governments at the Welsh Assembly and Westminster to join us to save this plant, and to prevent yet another grave injury to UK manufacturing."
Ford makes about 1.3 million engines at two locations, Bridgend and Dagenham, in eastern England. It has previously warned it could face $1 billion in tariff costs in the event of a so-called hard Brexit.
In January, Ford said it would cut thousands of jobs, look at plant closures and discontinue money-losing vehicle lines as part of a turnaround effort, and would start consultations with unions on the plans.
North America implications
The Bridgend plant has been a major source of engines for vehicles sold in North America, for three brands – Ford, Jaguar and Land Rover. But changes to product plans have reduced the vehicles supplied with Bridgend-built engines.
Jaguar Land Rover operates a plant within a plant at Bridgend to produce V-8 engines, but that contract with its former owner Ford ends in 2020.
JLR’s AJV8 produced at Bridgend is used in certain Range Rover and Jaguar high-performance models. Jaguar has just launched a powerful new twin turbo inline six-cylinder engine that will likely replace some V-8 applications. Also, JLR is expected to begin using a twin turbo V-8 sourced from BMW.
Bridgend produces the 1.6-liter engine used in the Ford Fiesta, which is ending production for the United States this year.
Brexit issues
While the company has announced 5,000 job cuts in Germany, its second-biggest European market, it has yet to make major decisions in Britain, which is its biggest.
Britain's largely foreign-owned car industry has become increasingly concerned as the country descends into political crisis as it nears a deadline to exit the European Union.
Ford's British-built engines, which are shipped for fitting in vehicles produced in Germany, Turkey, the United States and elsewhere, could face delays and extra costs from a no-deal Brexit.
Automotive News staff, Richard Truett and Nick Gibbs contributed to this report
