Today – 25 September 2020 – Ford will close the engine plant that it opened in Bridgend in 1980. At that time, it was seen as a major development for the local economy and the prospect of South Wales emerging as a major producer of automobile parts. Standing alongside Ford’s axle plant at Jersey Marine and its spark plug operation in Treforest it suggested the prospect of a growing concentration of employment in that sector, The presence of Borg Warner’s transmission plant at Kenfig Hill and Girling’s brake production facility at Cwmbran all added to thus optimism. It seemed that a happy accommodation had been reached between the investment decisions of large transnational corporations and the aspiration of the (not yet devolved) Welsh economic development strategists. The opening of the engine plant was also hailed as a major success for the “speed and effectiveness” of the old Welsh Development Agency with the £180 million investment flying at its masthead. It was, said the newspaper headlines “A Triumph for Wales” So where did it all go wrong? Or how did it happen at all?
The decision to locate the engine plant at Bridgend had been taken three years earlier in 1977 and then after a lot of planning by Ford and a lot of manoeuvring on the European chess board. Ford had decided to bring out a Mark III version of the Escort which would be a complete rebuild and different in many ways from the classic Mark I which I had seen first roll off the assembly line in the Halewood plant in 1966. That was at the time when the company was creating Ford Europe. Ten years later much had changed with the company then talking of global production and of making a “world car”. The mark III was to be this car with the same model being built in identical plants around the world where it would also be sold and driven. In Europe Ford needed a secure location for a plant that would produce almost 700,000 engines a year for this new car. Just how it ended up at Bridgend was an interesting and revealing story which I wrote about in the second edition of my book Working for Ford.
In 1977 Prime Minister James Callaghan was recovering from the shock of the previous year’s financial crisis and the draconian intervention of the IMF. In this weakened state he met with Henry Ford in Downing Street and told him: “Henry we are turning this country around. And you, if you choose, can help us do it”. This must have been music to Henry’s ears given that UK wages were significantly lower than German ones, while car prices were significantly higher with Ford’s outselling all other makes at a time when British Leyland was in terminal crisis.
By that time too Ford had scoured Europe and put together a number of possible sites for its new plant. Each one had been analyzed in what the company (with a glance at history and the macabre) called its “Doomsday Books”. In these books, issues like geographic location, the state of the labour market and trade unionism would be weighed along with the inducements on offer, though a series of 92 questions. In the end it would be the finance that would settle it, and Ford was renowned for its capacity to play hard ball in such negotiations. Having been given the green light in Downing Street it decided to press its advantage.
In South Wales at that time there were Special Development Areas that provided inward investors with a 22.5% grant – Miskin was one and was thought of by the WDA as a suitable site for the new plant. Ford however had chosen Bridgend because of its proximity to the interchange on the new M4; but Bridgend was not a Special Development Area. So in the October, Ford issued an ultimatum to the government in London given it 24 hours to change the designation of Bridgend. This produced one of the more farcical moment of the Callaghan government. Alan Varley the Secretary of State for Industry was not available to sign the relevant papers so they had to be taken across London to Tower Bridge where the junior minister Alan Williams was on a visit to the Port of London Authority in order for Ford to get its extra two and a half percent.
When the sums were all added up, and finally made public, the £180 million investment looked rather different. In addition to the £40 million under the regional grants scheme Ford also receive £75 million for assisting job creation. A total of £115 million is state support to which Ford added £65 million. It was a good deal for Ford.
Now as the global strategy tilts it’s off somewhere else; it has another engine plant in Mexico with spare capacity. However it leaves behind more workers without jobs, and a shattered industrial strategy that raises serious questions about the future.