Written evidence from the Ford Motor Company
INQUIRY INTO MANUFACTURING AND TRADE IN WALES
COMPANY GLOBAL
OVERVIEW
Ford Motor Company, headquartered in Dearborn,
Michigan in the United States of America, is the world's second-largest
vehicle manufacturer, with approximately 350,000 employees in
200 markets on six continents. Its automotive brands include Aston
Martin Lagonda, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury
and Volvo—combined sales were just under seven million vehicles
in 2002. Ford Motor Company's automotive-related services include
Ford Credit, Quality Care and Hertz. Turnover for all Ford Motor
Company operations in 2002 was $162.6 billion. Ford Motor Company
observed its 100th anniversary on 16 June 2003.
FORD MOTOR
COMPANY IN
BRITAIN
Ford Motor Company's association with Britain
began in 1903, the year of the company's founding in the United
States, when two Ford Model A cars were shipped to the country.
By 1908, a Ford sales company had been established, and the first
Ford manufacturing plant in Britain was opened at Trafford Park,
Manchester in 1911. The first Ford vehicle built in Britain was
the Model T.
Today, Ford Motor Company subsidiaries in Britain
employ around 37,000 people—around 45% of all Ford Motor
Company employees in Europe. Four Ford Motor Company brands build
vehicles in the country—Ford "Blue Oval", Jaguar,
Land Rover and Aston Martin Lagonda. The Bridgend and Dagenham
Engine Plants also build petrol and diesel engines respectively
for Ford and Jaguar products. Ford Motor Company Limited—Ford
"Blue Oval" in Britain—has been the new car sales
market leader for the past 27 consecutive years, and leader for
38 successive years in the medium commercial vehicle market.
FORD MOTOR
COMPANY MANUFACTURING
OPERATIONS
Ford Motor Company has manufacturing facilities
located in 25 countries on six continents. Manufacturing employment
is about 80% of the approximately 350,000 people employed at Ford.
The company produces passenger cars, commercial vehicles, engines,
transmissions, castings and forgings, and metal stampings of all
kinds at its 110 wholly owned, equity-owned and joint venture
plants. The company has 20 engine plants globally.
Ford Motor Company has 35 manufacturing operations
in nine countries in Europe (including Turkey). Of its 20 global
engine plants, six are located in Europe (including one in Turkey).
BRIDGEND ENGINE
PLANT
Built in the late 1970s at a cost of £180
million, Ford Bridgend Engine Plant was opened in May 1980. During
its early years, the plant produced 1.1, 1.3 and 1.6-litre Ford
CVH engines for export across Europe. In 1989, the plant produced
the first engine to meet the projected 1996 European exhaust emissions
regulations—the 1.4i electronic fuel-injection engine. More
than six million CVH engines were produced at Bridgend from 1980
to 1996.
In 1988, work began on an additional manufacturing
facility extending to the existing plant. The new facility was
completed in 1991 and produced nearly 10,000 Zetec engines in
its first year of manufacturing. The plant was also awarded the
prestigious Ford Q1 Award for quality the same year. In the following
year, 1992, Bridgend won a new project to build a V8 engine for
Jaguar.
In 1996, Bridgend began to build the Zetec SE
engine and also started production volume production of Jaguar
V8 engines. The following year, work began on a £1.5 million
solar power installation that was opened in 1998 in conjunction
with Cardiff University—the same year as the opening of
the Waterton Technology Centre that was developed as a facility
which would allow small and medium enterprises to gain experience
in leading edge training, particularly in lean manufacturing training.
Bridgend became the sole supplier for Zetec
SE production in 1999 following an investment of £30 million,
with Zetec SE capacity increasing from 400,000 to 700,000 units.
By 2001, its 21st anniversary, Bridgend had built more than 10
million petrol engines.
Petrol engines for Ford vehicles are primarily
shipped to plants in Cologne and Saarlouis in Germany, and Valencia,
Spain. Some production is also exported to Ford plants in Argentina
and Russia. Jaguar V8 engines are shipped to Brown's Lane and
Castle Bromwich in the West Midlands. Camshafts and con rods manufactured
at Bridgend are exported to Yamaha in Japan.
The Ford Bridgend Engine Plant currently employs
around 1,400 people (including 300 on the currently employed on
the Jaguar V8 line). The site size is approximately 59.3 acres,
with a plant size of 141,702 sq m (1,5252,320 sq ft). Ford's total
investment at Bridgend since building of the plant began in 1978
until the present day is £1.2 billion.
CURRENT AND
FUTURE DEVELOPMENTS
AT BRIDGEND
In March 2001, Ford Motor Company announced
it was to invest $360 million, dependent on regional grant assistance,
in the Bridgend Engine Plant to produce V engines for use in its
Premier Automotive Group products. (Ford Motor Company's Premier
Automotive Group comprises Aston Martin Lagonda, Jaguar, Land
Rover and Volvo). This decision was subject to More than 600 jobs
would be created in the plant as a result of the engine programme.
The investment emphasised Ford Motor Company's continuing commitment
to Britain as a manufacturing base, and highlighted the company's
policy of maximising its manufacturing capacity and resources.
The intention was to move production of the V engines from Ford's
Cleveland, Ohio engine plant to Bridgend, freeing up capacity
at Cleveland to build more engines for North American applications.
However, in November 2002, Ford Motor Company
decided on a further refinement to engine production within its
manufacturing network in Europe. This change is intended to ensure
that the full strength of the company's multi-brand manufacturing
network is used to optimise engine production for its European
brands.
Under the November 2002 plan, Volvo will reconfigure
its Skövde plant in Sweden to produce a new four-cylinder
diesel engine. Production is due to start from end 2005. Volvo
will continue five-cylinder engine development, and production
will remain at Skövde.
The Bridgend Engine Plant will now become the
single source for a range of inline six-cylinder (16) petrol engines
in Europe supplying the Premier Automotive Group brands. This
engine is based on an existing Volvo 16 engine that is presently
built at Skövde, with production at Bridgend expected to
start in 2006, dependent upon the provision of regional grant
assistance. Volvo will be the centre of development for the new
range of six-cylinder in-line petrol engines.
The 16 engine will replace the previously planned
V6 engine originally announced for Bridgend in March 2001. The
level of investment for the new engine is now $425 million—$65
million more than had been planned for the V6: Ford expects the
same number of jobs, namely around 600, to be created by the new
16 investment by the time the engine is fully on-stream in 2008.
(Some of these 600 jobs have already been taken on at Bridgend.)
Bridgend Engine Plant was chosen for the 16
programme because of its proven record in building high quality,
Jaguar engines for the XJ, XK and S-TYPE, and its close location
to a number of British-based Premier Automotive Group plants where
such an engine could be installed. Also, the 16 is a direct replacement
for the V6 that was announced to go into Bridgend in 2001. The
engine plant will also supply 16 engines to Volvo plants in mainland
Europe (the existing 16 is currently used in Volvo's S80 and XC90
models). The engine exports to Volvo will further boost Ford Motor
Company's export volume and value of parts from the UK. (Jaguar,
Land Rover and Aston Martin are already Britain's biggest value
export to the United States.)
The new 16 engine line will be housed within
the existing facility at Bridgend as planned for the V6 and upgrade
to the current production Jaguar V8 engine. This adds to investment
efficiency.
Once the 16 line is fully operational, total
Premier Automotive Group engine production at Bridgend—16
and V8 derivatives combined—will amount to around 325,000
units per annum.
In terms of the supplier base for the new 16
engine, when suppliers were informed of the decision to move from
the V6 to 16 engine Ford Motor Company explained that, as valued
suppliers, sourcing opportunities may emerge for them on the 16
programme. These opportunities will be communicated to the suppliers
in due course, but they are advised to stay in close contact with
the Jaguar purchasing department.
ZETEC PRODUCTION
Zetec (not Zetec SE) production ends in October
2004. Employees on this Iine will transfer to either the Zetec
SE or upgraded current V8 and 16 lines.
BRIDGEND INDUSTRIAL
PARK
A site owned by the WDA, adjacent to the Bridgend
plant, has been earmarked for development as an industrial park
that will serve the plant and other industries in the region.
It is planned to be a high calibre technical and manufacturing
site in the region. This is a WDA initiative and they will be
able to supply further details.
Engines currently produced at Bridgend and
vehicle applications
1.25-litre 4-cyl Zetec SE: Fiesta.
1.4-litre 4-cyl. Zetec SE: Fiesta.
1.6-Litre 4-cyl Zetec SE: Focus and Fiesta Sport.
1.8-litre 4-cyl Zetec: Focus.
2.0-litre 4-cyl. Zetec: Focus.
3.5-litre V8 Jaguar: Jaguar XJ8 and S-TYPE.
4.2-litre V8 Jaguar: Jaguar XJ8, XK8 and S-TYPE.
4.2-litre V8 Supercharged Jaguar: Jaguar XJR
and XKR.
Production volume in 2003
Production volume 2003 of all models was 596,621
units. (Zetec SE: 496,873; Zetec: 64,152; Jaguar V8 derivatives:
35,595.)
INVESTMENT OVERVIEW
In recent years Ford Motor Company has made
substantial new investments in the UK, and these are investment
actions are ongoing: at Dagenham in diesel engine manufacturing
and engineering, and other actions; at Bridgend to build a new
inline six-cylinder petrol engine for PAG products; at Halewood
for the production of Jaguar X-TYPEs and Land Rover Freelander;
at Southampton for the Ford Transit; at Castle Bromwich for the
Jaguar XJ, to name but the most significant.
Ford Motor Company's investment decisions are
long-term commitments take into account many factors including:
market demand; existing manufacturing capacity; proximity to a
competitive supply force; a productive, flexible and well-educated
workforce; infrastructure support; GDP and economic growth of
the country in question; past history of investment; etc.
BARRIERS TO
TRADE
Ford Motor Company warmly welcomed the Doha
Development Agenda. The company considers the liberalisation of
international trade as essential for the further development of
its business. Through ACEA, the association of European car manufacturers,
Ford has expressed its support for the WTO negotiations, and outlined
its position to the Commissioner for Trade, Pascal Lamy, as to
the absolute necessity that both tariff and non-tariff barriers
are further reduced on a global basis. However, tariff barrier
(and non-tariff barrier) reduction should be achieved on the basis
of all products, all sectors and all countries.
INDUSTRIAL POLICY
Ford Motor Company believes the European Commission
and national governments need to strive to achieve a better balance
in assessing the economic, social and environmental impacts of
newly proposed legislation. Too often, new regulations are adopted
when the costs on industry clearly outweigh the anticipated benefits.
Ford recommends that all proposed EU regulations
should be subject to a detailed cost/benefit analysis conducted
by an independent body. This autonomous body would have to be
created as part of a new EU treaty. Further, Ford proposes that
the EU Competitiveness Council should be given additional responsibilities.
It would be helpful if the Competitiveness Council had the right
to review all draft proposals for new regulations impacting on
industry before. being formally adopted by the European Commission.
If a detailed cost/benefit analysis does not justify the proposal
going ahead in its existing form, the Competitiveness Council
should be empowered to have the proposal changed by the Commission.
January 2004
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