2. Urgent Question: The Ford Factory in Bridgend

– in the Senedd on 7 February 2017.

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(Translated)

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

Photo of Elin Jones Elin Jones Plaid Cymru 2:17, 7 February 2017

(Translated)

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

Photo of Russell George Russell George Conservative 7 February 2017

(Translated)

Will the Cabinet Secretary update members on steps being taken by the Welsh Government to safeguard the future of the Ford factory in Bridgend? EAQ(5)0118(EI)

Photo of Ken Skates Ken Skates Labour 2:17, 7 February 2017

The First Minister and I have met senior management from Ford Bridgend and Ford Europe to discuss the issue. We remain in contact with management, the workforce and trade unions.

Photo of Russell George Russell George Conservative 2:18, 7 February 2017

Can I thank the Cabinet Secretary for his answer? The Cabinet Secretary perhaps may not be aware of breaking news that union leaders are now so concerned for the future that they have given Ford a fortnight to come up with an alternative plan. So, there remains, of course, serious concern amongst the plant’s 1,850 workers over what the future holds. It seems that there’s been little sign of progress. That’s the position as it stands today.

Can I seek perhaps some assurances from the Government that you’ve looked at every opportunity, explored particularly the long-term future of how you can support the factory in Bridgend and also that any developments are properly communicated to the workforce and your involvement in that?

Further to that, I wonder if you could answer what discussions the Government has had about alternative opportunities for the plant, in particular given the fact that the Ford plant in Dagenham is now at full capacity, building diesel engines. What discussions have been initiated with Ford about the prospect of bringing their production of electric engines to Bridgend?

And finally, previous investment by Ford has attracted £15 million of investment by Welsh Government. What intention does the Government have to incentivise future opportunities for production at the Bridgend plant?

Photo of Ken Skates Ken Skates Labour 2:19, 7 February 2017

I’d like to thank Russell George for his questions and also his breaking news, which I can provide a further update on. [Laughter.] The Senedd would wish to be aware that the general secretary of Unite the Union, Len McCluskey, along with the general secretary of Unite the Union Wales, Andy Richards, have today visited Ford Bridgend. They spoke with senior shop stewards and then went on to discuss issues with senior Ford management. Discussions centred on the competitive nature of the plant and all concerned agreed to continue to strive to make the plant as competitive as possible when compared to its European counterparts. Len McCluskey asked for data from Ford concerning the manufacturing cycle of the plant. He also asked for other competitive sites’ information and reassurances from Ford regarding its long-term future for the Bridgend plant. I’m pleased to say that Ford have agreed to this request and will pass the information on to the general secretary prior to a mass briefing back at the plant on 1 March. I do need to reiterate the point that we will continue to work with all stakeholders to ensure the future of the site, including the introduction of the Dragon engine, and I’ll use all assets available to me to assist the company and to identify new business.

I must also pay tribute to the local Assembly Members who have been fully and consistently committed to the site, including the Member for Bridgend, Carwyn Jones, and the Member for Ogmore, Huw Irranca-Davies. We are keen to see the site thrive and prosper. I think there are certainly opportunities insofar as petrol engine development is concerned. We know from the Volkswagen scandal that there has been a significant dip in demand for diesel engines and, therefore, a rise in petrol engines. But we also know that there is an increasing demand for electric engines and we are keen to work with Ford to identify what opportunities in that new and emerging area of technology can be utilised for Ford Bridgend.

Photo of David Lloyd David Lloyd Plaid Cymru 2:22, 7 February 2017

Thank you, Cabinet Secretary, for the answers thus far. Obviously, a key issue seems to be uncertainty around the UK’s membership of the single market and it is a clear signal of the pressure that Wales faces and will continue to face if the hard Brexit position being taken by the UK Government continues during the Brexit negotiations. We’re all aware, obviously, that you and officials have been working hard behind the scenes as regards Tata Steel in these difficult times. Can we be assured as well, further to what you’ve already said, that behind the scenes you are also exploring all possible options to secure the long-term future of the Ford plant in Bridgend?

Photo of Ken Skates Ken Skates Labour

Yes, I can assure the Member of that and I would agree that there are uncertainties across not just the automotive sector but advanced manufacturing as a whole about the impact that a hard Brexit could have on the Welsh economy. For that reason, we have been consistent in our approach in saying that Wales requires full and unfettered access to the single market. It’s interesting and it’s important to bear in mind that 30 per cent of Ford’s European sales are in the UK. The UK is its biggest European market and Ford makes 68 per cent of UK automotive engines, 40 per cent of which are made here in Wales. Wales and our Bridgend site are vital to the company, not just within the UK, but also across Europe.

Photo of Suzy Davies Suzy Davies Conservative 2:23, 7 February 2017

I suppose the first question I should ask you, Cabinet Secretary, is whether the information that Len McCluskey is asking for is already with you. In September, you answered questions in this Chamber on the situation at the Ford plant based on reassurances that you’d had in June that year. In particular, you said that Ford had told you that there was no surplus of labour in the short term. So, five months on, I’d like to know what you consider to be the definition of ‘short term’. One of the questions you didn’t answer in September was that of my party leader, Andrew R.T. Davies, about key dates for decisions and for investments. I’m wondering: are you any nearer being able to give us those key dates now? As Welsh Government’s conditional investment earmarked for Ford in Bridgend is based on the number of jobs it can secure over five years, how is the delay between, shall we say, September and now, and what looks like being an ongoing delay, affecting your ability to respond to big announcements? I’m thinking particularly with regard to your own budget.

Finally, Ford’s commitment was to 125,000 Dragon petrol engines with potential—that was your word at the time—for twice that number of units. So, did you succeed in your conversations with the head of Ford Europe’s powertrain unit in concluding how the demand for the Dragon engine can be stimulated? At the time, that was accepted to have nothing to do with Brexit. If you haven’t managed to come up with ideas about how demand can be stimulated, which of those alternative production ideas that you put forward to us in September looks like it could be the one that would come to Bridgend in the event of default on Dragon? That was a point that you didn’t answer when Russell George raised it. Thank you.

Photo of Ken Skates Ken Skates Labour 2:25, 7 February 2017

Can I thank Suzy Davies for her questions, and say that there are key dates, and that the five-year plan is, of course, essential? Len McCluskey has rightly asked for further information concerning the five-year plan to be able to share with the workforce, who are rightly concerned. But, 2020 is also a key date and we’re seeking assurance from Ford and we’re willing to work with them and invest, if necessary, in opportunities to make sure that there is a long-term sustainable future for the plant. We have already worked with Ford Bridgend in investing more than £140 million at the site since 1978, and this has included support for skills. It’s included support for capital investment, improvements to infrastructure and also environmental improvements. We will do what we can in order to make sure that the plant has a strong and viable future and capitalises on the incredible productivity levels that we’ve seen in recent times. But, we’re keen to ensure that the competitiveness of the plant matches that of its European counterparts, as I’ve said. We will be nimble in our approach in terms of what support may be required, were Ford to come to us with a request for support, particularly to take advantage of new and emerging technologies. We offer a range of support mechanisms to assist businesses—large and small—to take advantage of new technology, and I’m sure that this is something that Ford would be very keen to explore with us.

In terms of stimulating demand for petrol engines, as I’ve already outlined, the relative decline in demand for the diesel engine following the Volkswagen scandal has given rise to an increasing demand for petrol engines. Ford have reiterated that the anticipated production volume of engines from Bridgend remains healthy in the upcoming years, and I think we should take confidence from that, with associated labour requirements expected to be similar to today’s levels.

Photo of Andrew RT Davies Andrew RT Davies Conservative 2:27, 7 February 2017

Cabinet Secretary, I’m grateful for the answers you’ve given to date. Obviously, this is a huge concern and many of the employees also live in the Vale of Glamorgan and across the South Wales Central region. The jobs, historically, at the Bridgend engine plant have been very attractive, well paid, and people have stayed within the plant once they’ve found employment there. There is a unique set of circumstances around this plant; obviously it was part of the Jaguar Land Rover family many years ago. Ultimately, a lot of that capacity will now move to Wolverhampton with the new engine plant that Jaguar Land Rover have opened there.

I did ask you back in September about your intentions and engagements with the company to try and secure a medium to long-term future for this plant. As we know, the decision to downscale production at the engine plant was taken in Detroit, at Ford’s world headquarters, not in Europe, and not by the UK management. I note that, to date, you have not undertaken the visit that you said you were going to be undertaking at the time of that urgent question—to go to Detroit and have face-to-face discussions with Ford at their world headquarters. This is part of, obviously, a huge operation in Europe and across the world that Ford periodically look at, and I would ask: when will you be undertaking that visit to Detroit to actually speak to the people who are making these decisions, and can give the assurances that this Government, the employees and the community around the Bridgend engine plant require? Because, as I said, for nigh on 40 years now, that plant has provided quality jobs and has provided security as well. But I don’t think it’s helpful with the rhetoric today that if a plan isn’t forthcoming within two weeks there will be strike action at that plant, as Len McCluskey has indicated in his press statement. I hope that you will agree with me that strike action is the last thing that the Bridgend engine plant requires.

Photo of Ken Skates Ken Skates Labour 2:29, 7 February 2017

I think it’s worth pointing out—and I’d like to thank the leader of the opposition for his question. It’s worth pointing out that Ford have agreed to provide the information that has been asked for that will calm anxiety within the workforce. Discussions today have been very productive. Indeed, discussions between Welsh Government, the head of Ford Europe, Linda Cash, the workforce, trade unions and senior management have been constructive and productive for many months.

The decision was taken in Cologne; all key decisions by Ford Europe that concern Ford European plants are taken in Cologne. However, as I’ve stated in the past, we’re more than willing to go wherever is necessary in order to secure the future of the Ford Bridgend site. If that means going to Detroit, we will go to Detroit. But, we have been assured that the decisions are taken within Europe. And for that reason, we are engaging with the people who will make decisions on the future of Ford’s European plants.

Photo of Elin Jones Elin Jones Plaid Cymru 2:30, 7 February 2017

(Translated)

Thank you, Cabinet Secretary.