Iveco to close Langley factory

Chris Godsmark

Business Correspondent

Iveco-Ford, the truck-making joint venture between Fiat and Ford, yesterday confirmed plans to close its historic Langley plant near Slough in Berkshire with the loss of 450 jobs.

Iveco said it took the move, another blow to the already shrinking British commercial vehicle industry, because of overcapacity in the European truck market. Alan Fox, the chairman, said demand for medium-sized lorries had shrunk by 40 per cent in the past 20 years.

Production will shift to Brescia in Italy, a move the Transport and General Workers Union said amounted to "social dumping".

The union said it mirrored Ford's recent decision to shift long-term production of the best-selling Escort from its Halewood plant on Merseyside, involving the loss of about 1,300 jobs.

The Langley factory, built 90 years ago, was used to make Hawker Hurricane fighters during the 1930s and 1940s and started producing trucks 35 years ago. Workers build the Cargo truck, which last year took 20 per cent of the UK commercial vehicle market, making it Britain's best-selling lorry. Ford sold its UK truck-building operations to Iveco in 1986.

Production at the site has been declining for several years. In 1996 it made just 7,677 Cargos, of which a fifth were exported, compared with a full production capacity of about 20,000 vehicles. In its best year it managed to make fewer than 17,000 trucks.

Another factor in Iveco's decision is likely to be the value of the 65- acre Langley site, which Ford owns and could sell for more than pounds 50m, depending on whether the local council grants planning permission.

The news came as Renault, the troubled French car giant, announced plans to close its factory in Belgium. Renault said the move would cut its costs by Fr850m (pounds 95m) a year in the face of a huge drop in French car sales. However the one-off cost of closing the plant would total Fr12bn, Renault warned.

Demand for cars has slumped after France ended a scheme to subsidise private buyers willing to scrap their old models. Renault and the privately owned Peugeot group remain unusual in selling almost half their production in their home market.

Workers at the Belgian plant were said to be planning to strike on Monday.