[R] signifies the Member has declared an interest. [W] signifies that the question was tabled in Welsh.

I have accepted two urgent questions under Standing Order 12.66. I call on Bethan Jenkins to ask the first question.

Will the Minister make a statement on Ford’s announcement that it is to cut production at its Bridgend engine plant? EAQ(5)0037(EI)

Clearly, I was concerned to hear of the announcement. Ford is a company that we are very close to and is matching supply with demand but is still investing £100 million into the site and safeguarding 550 jobs. I will work with all stakeholders to ensure the future of the site and its loyal workforce.

Presiding Officer, I find it quite disturbing that the First Minister, whose constituency it’s in, has left on this very question because I wanted to refer earlier to what he said with regard to Brexit because I share a bit of cynicism about this being entirely to do with Brexit, considering that Ford is a multinational company, and they did not say this pre Brexit. Since devolution the Welsh Government has invested over £43 million of public money in Ford Bridgend, a not inconsiderable investment in a plant that is just 36 years old, and one that also sources little if nothing from within Wales. I believe that the last of the three rounds of funding for the EcoBoost engine was paid last year. Given the company’s history in Swansea—and I have the scars, alongside the Visteon pensions fight—what guarantee have you sought from the company that it won’t just up sticks, leave the staff in the lurch and then give the bare minimum back to Wales after having had so much funding from you as a Welsh Government?

Can I thank the Member for her question? I’ll ignore the opportunistic cheap shot at the First Minister, but I do infer from what you were saying about the Welsh Government’s investment in Ford that you disagree with the Welsh Government’s investment in the Ford plant and the 1,850 people who work there. We are proud to have invested in that site: one of the most efficient and effective car-manufacturing centres in Europe. It produces engines that amount to something in the region of £700,000 for the entire Ford diesel family. It’s, as I say, one of the most efficient and effective plants, and productivity levels there are amongst the very best.

In terms of Brexit, there is no doubt whatsoever that Ford, like many others, wish to see unfettered access without tariffs to the single market. That is one of their primary concerns in the discussion and the debate about how Wales should operate as part of the UK moving forward. I clearly believe—and I’m sure that the Member would agree—that we should have unfettered access to the single market without tariffs and within a stable regulatory environment in which we can operate.

Now, I can say that, as a result of discussions that we’ve had already, my officials are actively working with senior Ford staff to look at future high-tech investment opportunities for the site. I’ve also been in discussions with senior executives within Ford to explore the opportunity for additional investment projects to safeguard the entire site at Bridgend. I’m expanding those current discussions beyond those originating in Europe to include all of Ford’s projects across the globe. In particular, I’m open to discussions with Ford’s headquarters in Detroit. You may wish to be aware that I have instructed officials to alert Ford HQ that I do intend to visit and to meet with them later this autumn.

The majority of the employees in Ford Bridgend are in the constituency of my friend, the First Minister, but also my own. Having spoken to the unions and the workforce and Ford’s management themselves it is clear that whilst Brexit isn’t the pertinent factor in this decision—it’s a lower volume of the production of the Dragon engines—it is an issue that is concerning them because of this very issue that the Cabinet Secretary says, which is that, in order to make a success of this plant, we need future constant reinvention of the product lines, new investment in those lines, and to have the Welsh Government standing firmly behind them, as we’ve always done in the past as well. This is a darn good workforce. They are highly skilled. It is one of the most productive lines within Europe of any automotive engineers. It has a good future, and we must talk the plant up, but the workforce does have those concerns that there will actually be future investment in new lines. So, at the earliest opportunity when he can expand on those plans, that would be really helpful, because we need to see these jobs maintained in south Wales.

Well, I share the Member’s concerns about the workforce, and I share the workforce’s concerns about the future operations of the plant. Indeed, I have spoken with the general secretary of Unite the union and with others to discuss how we can work together with Ford to identify opportunities to sustain engine-building operations at Bridgend. I think there are a number of positives that we can take from the current situation at Bridgend. First of all, it’s likely that, with dieselgate, demand for petrol engines will increase. What Ford have told us is that, at the initial stage, the production of the new engine—the diesel engine—will begin with something in the round of 125,000 units annually. However, they have been clear that there will be the capacity to increase that up to, potentially, the 250,000 units. I’ve said that I will remain firm in my commitment to support Ford, but our level of support will be proportional to the number of jobs they can secure. The money that was there to secure the 770 jobs is still on the table if they can guarantee them.

Now, in terms of a second positive, as the Member has just identified, Bridgend is one of the most efficient and productive engine plants anywhere on the planet. Thirdly, it has one of the most skilled workforces to be able to rely on. Fourthly, there are new electric engines and new technology—of which we are at the forefront—that will be exploited right across the engine sector. I wish to see Ford at Bridgend take advantage of that. In addition, we know that Aston Martin will be building cars here in Wales. I wish to explore the potential of moving the modification of the Mercedes V12 engine from Germany potentially to Wales. I think it would be a great asset for Ford. Finally, the potential is there for further capital investment, which my officials are already exploring, along with Ford. I think there is a question to be asked of the sustainability of the relatively low price of diesel as well, as a product, which has driven demand in diesel-powered cars. I don’t believe that that can be sustained in the long run, and that there will be a readjustment towards favouring petrol, which in turn would be of benefit to the Ford Bridgend plant.

Suzy Davies.

Diolch, Lywydd. Thank you as well, Cabinet Secretary. I found your answers quite helpful, actually, because I think we all share the same view on the quality and the effectiveness of the plant, but, despite that, any drop in investment is always going to be of concern to the workforce. The First Minister says that the problem is tariffs. You’ve said that there is a global drop in demand for the type of engines. I’m wondering which is the greater driver on this, and I wonder if you can cast some light on that. When you say that the Welsh Government will—and I’m quoting you—‘do everything it can’ to support the continuation of jobs in Bridgend, I’m curious to know precisely what you mean by that. Because it’s one thing to say that Aston Martin is there and that there’s a possibility that there’s an opportunity, shall we say, for Ford there. But, what exactly has Ford Europe told you about these high-tech ideas that are in development, and what you, as part of the Welsh Government, could do to bring those ideas forward more swiftly, so that the concerns about alternative production there might be met and put to bed, if you like? Because, standing where I am, it’s very difficult to imagine what that alternative production might look like, unless somebody actually tells me what it looks like.

In terms of additional financial support, you hinted that that might be on the table in your final answer to Huw Irranca-Davies there. But of course, £15 million from Welsh Government has already gone into this plant. I’m curious to know what guarantees you insisted upon before that £15 million was given. Was it just that jobs would be guaranteed, or was it that Ford’s own level of investment in that plant was also guaranteed? Because, again, you hinted in your responses that there might be changes of percentage of what you are going to hand over on that £15 million if you didn’t get the answers you were hoping for from Ford. So, effectively, if Ford’s decision doesn’t affect that commitment, I want to know why not.

Can I thank the Member for her probing questions? First of all, in terms of guarantees, with regard to the Dragon engine, we’ve been clear, as part of the contract with Ford, that we will not release a penny until we’ve seen £90 million invested in the plant to develop the Dragon engine. So, our investment will follow their investment. Our criteria for supporting developments of this type are a minimum of five years’ sustainable and secure employment for a specific number of people. That number is matched to the degree to which we are supporting the plant. The Member identified, I think, it was £50 million. Actually, that’s not in one lump sum. Since 2003, we’ve invested something in the region of £57 million in the plant to support over 1,000 jobs. Indeed, at the moment, it’s around about 1,850.

The Member asks about new products and current products that support the workforce there. I’ll quickly give an overview of what products are there and how they support current employment numbers. Bridgend produces the AJ engine. It’s an excellent engine that’s used for Jaguar Land Rover—a V6, V8 engine. It’s one of the best available; that is going to continue production at the plant. At the moment, there are 145,000 units, there or thereabouts, being produced. Secondly, the Sigma engine, and the Member will have heard about the EcoBoost engine, which is proving to be immensely popular—at the moment, there are something in the region of 550,000 units of that type being produced.

As we approach 2018, the investment in the new Dragon engine will be introduced, and from 2018, that engine will be manufactured. It was aimed to have 250,000 units produced from year one. At the moment, Ford are saying that, because of global demand—and I’ll come on to the demand question—125,000 units are now planned to be built there. As I’ve identified, there is already dieselgate and the low relative cost of diesel against petrol that could lead to an increase in demand for petrol engines as we approach 2018. Nonetheless, from 2018, there will be, as Ford identifies right now, from year one, 125,000 units being produced.

In addition, there are machined components produced at Bridgend, which amount to something in the region of 100,000 units. They are exported. So, clearly, at the moment, we have a pretty unstable currency market. We hope that we will see stability return as soon as possible, but with the relative value of the pound against other currencies, we envisage those exported manufactured components to continue at that level, if not above that level. That’s the current and immediate future of the plant. In addition, we are looking, as I’ve already mentioned, at a whole range of new technologies that are emerging in the automotive sector. The advancement of the automotive sector is accelerating and we wish to make sure that, whether it is with electric engines or whether it’s with autonomous vehicles, we are at the forefront of development. So, we’re in discussions with Ford about what their aspirations are for their products and how we can invest in the innovation and the technology required to realise their ambition.

In terms of the demand, which is the reason right now why Ford have reduced the estimated number of engines being produced from year one—right now it’s demand. However, longer term, the concern that Ford has, the concern that we have, and surely that everybody should recognise, is that without tariff-free trading with our single biggest external market, we will see a number of manufacturers struggle. Ford, amongst many, have identified a tariff-free access to the single market as being of paramount importance in the Brexit discussions. We remain very clear that, as we discuss what Britain should look like, and how Britain should interact with Europe in the future, that unfettered access to the single market, without tariffs, and in a stable and secure regulatory environment, is of paramount importance.

Cabinet Secretary, while it’s disappointing that the planned investment at Bridgend is being scaled back, it is reassuring to hear Ford reaffirm their commitment to the Bridgend plant and its flexible manufacturing capability. Both Ford and the unions refute the assertion that this decision is anything to do with Brexit. There have been other scare stories in recent days, saying that the announcement signals Ford’s intention to close the plant, but they are still making a major investment in the Bridgend facility. We must do everything possible to ensure that there will be no job losses as a result of Ford’s decision, but there is little we can do locally to counteract global demand. Cabinet Secretary, what discussions have the Welsh Government had with Ford regarding their future investment strategy for the Bridgend plant, and does the Welsh Government have any concerns regarding their own investment in the plant?

Ford is one of our anchor companies; we have a very close working relationship with them, and I asked my most senior officials to meet with senior executives in Europe to discuss long-term plans for the Bridgend site. That was back in June, when they assured us that the plans at that point, for 250,000 units, were still absolutely fine. That was back in June.

The Member is right—as I’ve said to Suzy Davies—that, in the very short term, Brexit may not be an immediate problem in its own right. However, Brexit is contributing to an unstable trading environment because of currency fluctuations. That cannot be welcome. Longer term, unless we have clarity about what it is we want from Brexit discussions, then I’m afraid it will just create even more uncertainty. Regardless of how you operate, or what you operate in, or whatever sector, what business wants more than anything is stability—in terms of a regulatory environment and in terms of tariffs. That’s what we wish to see delivered, for Ford and for all manufacturing in Wales.

And finally, Andrew R.T. Davies.

Thank you, Presiding Officer. Minister, thank you for the answers you’ve given. I think they’ve given clarity in certain areas. I do welcome your intervention in saying that you’re going to go to Detroit. The First Minister, though, in response to myself in First Minister’s questions, clearly identified that, as far as Ford was concerned, the ongoing developments at the factory were very much a Ford Europe decision, and, ultimately, those decisions will be taken here at their headquarters in Europe. Can you try and map out how you see, going forward then, the decisions that need to be taken, in a positive way, by Ford, and by the Welsh Government, and the gateways, and in particular the key dates that need to be met? Are you aware of key dates for investment that need decisions taking in the next 18 months to two years, to secure the future viability of that plant, and, importantly, where those decisions will be taken? Will it be Detroit, where this decision was taken, or will it be Ford Europe HQ?

Can I thank the Member for his question? I should just say that we have been assured by Ford—I must stress that we have been assured—that there will be no surplus of labour in the short term. So, those jobs there—the 1,850—are secure and safe in the short term. But, as I’ve tried to impress upon Members, I wish to see the plant secured for the long term, and not just the 1,850 people who work there now, but for future generations, and, indeed, a larger workforce, who would be able to develop a new generation of engines.

In terms of my anticipated visit to Detroit, it’s true that Ford Europe are the decision makers in terms of the development of engines that are produced on the continent, and within the continent, of Europe. However, I see no harm in influencing Ford at their headquarters level, in regard to this decision and any others. So, I wish to be able to meet with not just Ford Europe, but also Ford in Detroit, to discuss Wales’s part in the Ford family. I think it’s worth saying that we’ll be meeting—myself and the First Minister—in the coming weeks with the head of Ford Europe’s powertrain manufacturing unit. We intend discussing with him not just how demand for the new Dragon engine can be stimulated—both by Ford and by the market—but also how we can influence, how we can help and how we can assist in new technologies that Ford is wishing to develop not just here, but right across Europe, or indeed, as I said in answer to one of the earlier questions, right around the globe.

Thank you, Cabinet Secretary.