Blair faces Ford threat over aid to Welsh plant

FORD'S CHIEF executive will tomorrow warn Tony Blair that a key British plant could close with the loss of 1400 jobs unless the Government raises its offer of state aid.

In a visit to Downing Street, Jac Nasser will tell the Prime Minister that the Ford engine plant at Bridgend, south Wales, is under threat if ministers refuse to increase a proposed grant of pounds 30m.

It is thought senior Ford executives have become increasingly frustrated by Britain's refusal to match the level of aid available in other countries. A recent visit to the company's Detroit headquarters by Alun Michael, leader of the Welsh Assembly, made matters worse because he held out little hope of an enhanced financial package, according to some sources.

At issue is whether Ford chooses Bridgend to produce its new petrol engine, code-named I4/I5, which will require initial investment of an estimated pounds 250m. This will replace the Zetec-SE engine used in a wide range of models, including the Fiesta, the Mondeo and the Granada. Bridgend also produces a V8 engine for Jaguar. The Welsh works is Ford's largest petrol engine plant in Europe, producing nearly half a million units a year and it is considered to have a good productivity record.

Sources close to the plant say without the new engine the works would close. "Bridgend produces engines and it has to have a replacement when the Zetec reaches the end of its life," said one manager. The plant in mid-Glamorgan, which supports another 2,000 jobs in the area, is in an unemployment blackspot.

The plant at Cologne in Germany which has recently secured investment of pounds 150m and the complex at Almussafes near Valencia in Spain, are competing to make the I4/I5. Executives hope to reveal the identity of the successful plant in the autumn.

It is thought Ford's announcement on Tuesday that it was spending pounds 300m on a regeneration project at its Dagenham plant was timed to impress Mr Blair with management's commitment to investment provided public funds were made available. Ford's spending is being topped up with pounds 168m from local authorities to help rejuvenate the area near the plant.

Garel Rhys of Cardiff Business School said the company had been disappointed with the British response: "Ford has not been impressed so far with the commitment of the Government to an internationally mobile project."

Professor Rhys, an expert on the automotive industry, said the I4/I5 engine was vital to the future of Welsh plant: "It would not close tomorrow if it did not get the project, but it would definitely run down by the middle of the new decade. That is a horrifying prospect. Britain runs a very tight regime as far as state aid is concerned.

The Government is off the pace compared with both developing and highly developed countries - not just Spain and Germany. The message is: if you want to take part in the poker game, you must have a big enough stake."

A Ford spokesman it was a "bit dramatic" to say the plant was in imminent danger. "Management and unions get on very well there, but we are in a competitive business so it has got to prove itself to secure the new engine."

Start your day with The Independent, sign up for daily news emails
The Queen and the letter sent to Charlie
Arts and Entertainment
Eurovision Song Contest 2015
EurovisionGoogle marks the 2015 show
Two lesbians hold hands at a gay pride parade.
peopleIrish journalist shares moving story on day of referendum
Arts and Entertainment
<b>Kathryn Williams</b>
When I was supporting Ray La Montagne I was six months pregnant. He had been touring for a year and he was exhausted and full of the cold. I was feeling motherly, so I would leave presents for him and his band: Tunnock's Tea Cakes, cold remedies and proper tea. Ray seemed painfully shy. He hardly spoke, hardly looked at you in the face. I felt like a dick speaking to him, but said "hi" every day. </p>
He was being courted by the same record company who had signed me and subsequently let me go, and I wanted him to know that there were people around who didn't want anything from him. At the Shepherds Bush Empire in London, on the last night of the tour, Ray stopped in his set to thank me for doing the support. He said I was a really good songwriter and people should buy my stuff. I was taken aback and felt emotionally overwhelmed. Later that year, just before I had my boy Louis, I was l asleep in bed with Radio 4 on when Louis moved around in my belly and woke me up. Ray was doing a session on the World Service. </p>
I really believe that Louis recognised the music from the tour, and when I gave birth to him at home I played Ray's record as something that he would recognise to come into the world with. </p>
booksKathryn Williams explores the works and influences of Sylvia Plath
Liz Kendall played a key role in the introduction of the smoking ban
newsLiz Kendall: profile
Life and Style
techPatent specifies 'anthropomorphic device' to control media devices
The PM proposed 'commonsense restrictions' on migrant benefits
voicesAndrew Grice: Prime Minister can talk 'one nation Conservatism' but putting it into action will be tougher
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?