Ford invests £169m at Dagenham engine plant

Ford is to create a further 460 jobs at its Dagenham engine plant in Essex through a £169m investment which will increase output from the facility to one million diesel engines a year.

Ford is to create a further 460 jobs at its Dagenham engine plant in Essex through a £169m investment which will increase output from the facility to one million diesel engines a year.

The investment is being backed by £18m of funding from central government and regional agencies and will increase capacity at Dagenham by 400,000 engines from 2007 onwards.

Since car making ended at Dagenham in February 2002, Ford has spent £550m turning the plant into one of its biggest engine facilities and the sole source of the company's diesel engines in Europe.

Dagenham currently produces 600,000 engines ranging in size from 1.8 to 2.4 litres to power the Focus, Mondeo and Transit. In addition it supplies 2.7 litre V6 engines to Jaguar, Land Rover and Peugeot Citroën.

From 2007, it will start manufacturing smaller 1.4 and 1.6 litre engines for the Fiesta, Fusion and Focus models. These engines are currently sourced from a Peugeot factory in France.

The popularity of diesel engines has soared in recent years, particularly on the Continent. This year an estimated 37 per cent of new cars sold in the UK will be fitted with diesel engines. In Europe as a whole, 50 per cent of new cars are expected to run on diesel in 2006.

Roger Putnam, the chairman of Ford of Britain, said that the £169m investment had been won in the face of stiff competition from other Ford engine plants around the world.

The Dagenham expansion was welcomed by both the Secretary of State for Trade and Industry Patricia Hewitt and the Mayor of London Ken Livingstone. Ms Hewitt said the £4.5m grant which the DTI is providing "demonstrates the Government's commitment to high-value automotive manufacturing".

A further £13.2m in training grants is being provided by the London Development Agency and the London East Learning and Skills Council. Mr Livingstone said Ford's investment was a great boost for business in London and proof that the capital was still home to state-of-the-art manufacturing.