APPENDIX 13
Memorandum submitted by Ford Motor Company
Ltd
Follow up to oral evidence given by Ian McAllister
and John Crew, Wednesday 24 May.
Q. What are the differences in labour law in Germany
and the UK? Could you set out what the statutory requirements
would be for Ford in Cologne?
Attachment A summarises the statutory separation
requirements in the UK, Germany and Belgium (Ford Genk is part
of Ford Werke AG) and outlines our legal obligations when operating
separation programmes in the respective countries. Also included
in the summary are the separation terms that we have announced
to the Unions in the UK and that we will apply at Dagenham in
2001-02.
In order to illustrate the different payments
an employee would receive under each scenario, we have applied
the different terms to a typical semi-skilled Wage Grade 3 employee
(Attachment B). There are four example calculations reflecting
different age/service periods. These examples clearly illustrate
that the Ford Britain separation terms are financially far more
beneficial to employees separating from the Company than the statutory
terms applying generally in the UK, Germany or Belgium.
Q. Was there an investment security contract agreement
with Ford established in 1993 and reaffirmed in 1997, that there
would be no redundancies in Germany and does it contain clauses
which put special protection on Ford German workers. What was
the penalty clause and how could it be used should Ford renege
on the agreement?
In 1994 (not 1993 as stated in the question)
and 1997 the Company reached Agreements with the Ford Germany
Central Works Council on "innovative improvements to manufacturing
costs, quality, efficiency as well as flexibility of production
in German locations in order to strengthen the position of Ford-Werke
AG and its German plants and to secure employment." The Agreements
provided commitments on future investment on product in a number
of locations. As part of these Agreements employees made pay and
benefit concessions in order to assist the Company in the funding
of the commitments contained in them.
In 1997, a Ford Britain Employment Security
and Investment Statement was agreed with the Unions. The Company
made statements on a number of product sourcing actions and confirmed
its on-going and long-term commitments to its Manufacturing and
Product Development activities in Ford Britain.
Neither the Ford Germany Agreements nor the
Ford Britain Statement contains commitments to no redundancies.
In Germany, there is a supplement to the 1994 Agreement (incorporated
in 1998), which states that there will be no compulsory redundancies
as a consequence of the cessation of Scorpio production at Cologne
(occurred end June 1998). Ford has not operated a compulsory redundancy
programme in Britain for over 30 years.
There are no penalty clauses in the Ford Germany
Agreements (or in the Ford Britain Statement).
Q. Would you supply a copy of expected figures
to be employed in the pressing plant, wheel plant and tool shop
on the Dagenham Estate. Details of any further jobs to be created
in these areas?
We are yet to determine precise numbers. The
Press Shop has around 670 employees today. If we expand capacity
by introducing a weekend type fourth shift for production, we
may create around another 20-30 Press Shop jobs. In Group Tooling
we expect employment to remain at around the same levels as it
is today (480 employees). There is likely to be an increase, by
ten, in the number of Wheel Plant employees (from 25 to 35 employees).
In addition, there is the potential for around
an additional 230 Hourly Paid jobs in the Dagenham Engine Plant
in order to manage the increased diesel engine manufacturing capacity
planned between 2000 and 2004.
Q. There was some confusion about the movement
of engineers from the US to Dunton and from Dunton to Dagenham.
Can you be clear on how many are new recruits and how many are
transfers?
The following actions are planned in respect
of engineering:
— The transfer of the Commercial Vehicle
Engineering activity from the US to Britain. This will include
the engineering responsibility for the Transit and will create
around 360 new jobs in our UK based engineering activities (probably
located in Dunton).
— Further permanent hiring of around
100 engineers is anticipated over the next 12-18 months for Product
Development in Britain (probably located in Dunton).
— In addition, 240 Diesel engineers,
presently Dunton based, will be transferred to Dagenham. This
will co-locate engineering resources with the Diesel engine manufacturing
plant and strengthen the design/manufacturing process for Diesel
engines.
In total around 460 new engineering jobs will
be created as a result of these actions.
COMPONENT SOURCING
ISSUES
Q. Could you give an indication of the UK content
of the various engines which are produced in the Dagenham engine
plant?
What is the UK content of components in engines
produced at Bridgend? (UK sourced means companies based in the
UK)
Ford record the data requested above against
the Business Units which incur the expense, ie customer plant
such as Bridgend and Dagenham. We do not however, collect the
data for sourcing in the UK per engine line.
We are therefore unable to break down the sourcing
of components to individual engine types. The figures for the
plants should give an approximate guide as to the respective expenditure
in UK and overseas suppliers.
The figures for the two plants are as follows:
— UK content for Dagenham Engine Plant
is 50.7 per cent
— UK content for Bridgend Engine Plant
is 59.9 per cent
The percentages value is derived from comparing
the total turnover with that part of it incurred in Pounds Sterling.
It is Ford policy to denote the order in the currency of manufacture.
However, in the unlikely event, for example, that a UK supplier
has chosen to bill a UK plant in Euros, this will not be included
in the UK content of the above figures as they will not be recorded
in Pounds Sterling.
Q. Could you let us know the UK component content
on the old Transit as opposed to the new Transit which will be
built at Southampton?
The breakdown of data between UK supplied verses
overseas supplied components for the Old and New versions of Transit
production at the Southampton Plant is calculated in the same
way as for Engines.
Old transit current manufacture 53 per cent
GBP sourcing.
New transit average mix 43 per cent GBP sourcing.
LAND ROVER
Q. Further information on the agreement to purchase
Land Rover and the future of the Solihull and Gaydon facilities.
Ford Motor Company officially acquired Land
Rover on July 1, from the BMW Group. Ford paid 3 billion euros
(US$2.7 billion) for the Land Rover business, which includes its
full line-up of four-wheel-drive vehicles—Range Rover, Discovery,
Freelander and Defender. Ford Motor Company has acquired the rights
to the Land Rover brand, the Land Rover plant in Solihull (Birmingham),
as well as the Gaydon Research and Development Centre, the Land
Rover dealer network, the British Motor Industry Heritage Centre
(Gaydon), and a total workforce of approximately 13,000 employees.
Land Rover's new chairman and chief executive
officer is Bob Dover. Mr Dover has worked in the British motor
industry for 32 years. He has a background in engineering and
manufacturing and, from 1984 to 1987, served as director of manufacturing
for Land Rover.
Mr Dover has pledged the new management team's
commitment to Solihull as a manufacturing and assembly centre,
and to Gaydon as the company's design and engineering base. Gaydon
will also become the new corporate headquarters for Land Rover.
Currently making a loss, Land Rover is expected
to move into profit during 2002. Land Rover becomes a member of
Ford Motor Company's Premier Automotive Group, joining Jaguar,
Aston Martin, Volvo and Lincoln. Its chairman is Dr Wolfgang Reitzle.
GETRAG
Q. What will the weight of production between
the three different transmission plants (Bordeaux, Cologne, Halewood)
be? Will they, in future, be able to stop production at a site
without reference to Ford?
We do not anticipate any changes in the immediate
future. This is a 50:50 joint venture, which means that control
has not been ceded to Getrag and they will not have any undue
influence on the balance of sourcing between the three plants.
Future decisions on investment and product sourcing
will be made on normal business grounds: competitiveness, efficiency
and willingness to change being key factors. Halewood will have
to be in a competitive position to win its share of future investment
in the same way as the other two plants.
2 October 2000
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