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Ford Europe Closes British Gasoline Engine Plant

Ford Europe Closes British Gasoline Engine Plant.

“Brexit has not been cited as a major factor”

Ford Motor Co’s loss-making European subsidiary said it will shut an engine plant in Wales next year as part of its reconstruction plans to restore profitability.

The factory, in Bridgend, Wales, employs about 1,700.

This is the latest blow to Britain’s car industry. Honda is closing its British factory and Nissan have recently cut some models from its U.K. operation. Some experts say these closures were taken because of Britain’s plan to leave the EU, but companies say the decisions were taken on other grounds. 

Late last year Ford Europe said it reshuffled its leadership ahead of an expected shakeup. It said then it wants to concentrate on profit-making SUVs and vans and to cut loss-making vehicles.

Ford Europe is making cuts in several markets to turn around loss-making operations in a plan called “Sprint to 6 Reset and Redesign” as it attempts to return its profit margin to 6%.

The Bridgend plant’s contract to supply Jaguar Land Rover with engines ends in 2020. This includes V8 gasoline engines which are becoming obsolete. Ford makes about 1.3 million engines at two British locations, Bridgend and Dagenham, eastern England. It has previously warned it could face $1 billion in tariff costs in the event of a so-called hard Brexit.

Fitch Solutions Macro Research said indecision over Brexit is disrupting investment plans for Ford and other big manufacturers.

“Although Brexit has not been cited as a major factor, the uncertainty around future trade with the EU would make it difficult for Ford to consider future investment or new products for the plant, particularly as it exports engines to Germany and Turkey,” Fitch said in a report.

“As such, it is an example of the challenging operating environment facing all automotive companies in the U.K. until there is more certainty around the future relationship with the EU. It is also reflective of industry challenges throughout Europe at the moment as companies work to balance investment in new products and technology with a weakening sales market that is reducing income, while also faced with an uncertain global trade environment,” Fitch said.


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