Ford of Europe on Thursday said it would close its Leamington Spa foundry, in the central England county of Warwickshire, in July, amidst union claims workers were being bribed to go quietly.
The plant “operates within a competitive global market [and its] high cost base has long been a cause for concern,” the automaker said in a statement.
“This cost gap between Leamington plant and other competitors for new business was key in deciding that brake castings for Ford‘s next generation of small cars will not be produced in Leamington but sourced from elsewhere in Europe.
“As Fiesta brake castings represent over a fifth of the plant’s business, and are decisive in maintaining the plant’s viability, Ford has announced that Leamington plant is to close,” the statement added.
Ford said production at Leamington Spa would stop at the end of July.
“The decision to close the plant is due both to the plant’s uncompetitive cost position and the unwillingness of hourly-paid unions and employees in recent years to support the plant’s plans to improve. A plan to address Leamington’s costs had been presented and twice rejected by the hourly workforce in 2004 and 2005.”
Ford UK corporate affairs manager Brian Bennett told just-auto that the plan unions rejected had been to add a Friday night shift giving the plant a full working week of three-shift operation, improving efficiency.
In its statement Ford added that the market for small cars is intense and it is vital that it is cost-competitive. Compared with competing suppliers, the added cost of producing castings at Leamington is GBP10.8m a year.
Ford stressed there would be no involuntary separations, with the 387 employees offered specially enhanced retirement, separation or transfer options.
Employees choosing to move within Ford would be offered alternative employment at locations including the company’s Daventry Parts Distribution Centre. A voluntary separation programme will be made available in Daventry to make room for transferring Leamington employees.
Bennett claimed Ford UK had made no compulsory redundancies in over 40 years.
Ford added that other plants in Britain are expanding – a recruitment drive at its Dagenham diesel engine centre has created 250 assembly positions in the last year and, in Bridgend, new business from Ford -owned brands led to 200 new employees at the South Wales plant last year.
The Dunton Technical Centre, the UK’s largest automotive research and development centre, plans to take on 125 engineers this year.
The Leamington Spa workers “are being effectively bribed with enhanced payments to accept the closure of a plant which is one of the most productive in Europe,” according to the TRANSPORT and General (T&G) union’s national secretary for the car industry Dave Osborne.
“The T&G does not accept this closure as either inevitable or non-negotiable and we’ll do all we can to reverse the decision,” Osborne said in a statement.
Although he could not provide specific figures, union press officer Andrew Dodgshon maintained that the plant was efficient and “one of Ford’s most productive plants”.
In his statement, Osborne warned that Ford was looking to join the manufacturing march to the east (Dodgshon said the union understood Romania was likely) and said that was another reason to make clear the union’s opposition to the closure.
Dodgshon told just-auto that Ford had shortened the period between announcement and closure to just a few months (“they normally wear you down over a year or so”), and was offering “very generous” severance packages with early retirement, the ability to draw a pension from age 50, six months pay, plus a further six months’ pay just added as an incentive for a “smooth closure” (ie one without industrial action).
He said he understood the Amicus union (the other major trade union in the UK car industry) was “rattling the industrial action chain” but T&G planned to hold talks with all parties first.
He said Ford was “judge and jury” on the efficiency issue and had “the power to allocate” work to any plant.
Dodgshon added that the union would be consulting with Ford management, other union members in Ford’s UK workforce, local and national MPs and even talking with the European workers council to see if anything could be done to reverse the decision.