Outlook: Ford subsidy

ANOTHER CAR PLANT in crisis. Another visit to those generous folk in Downing Street. Tony Blair has created a rod for his own back by turning Number 10 into an open house for any motor manufacturer looking to squeeze some more state aid out of the taxpayer.

The latest supplicant is the Ford Motor Company, which is muttering darkly about removing a pounds 250m investment from its Brigend engine plant unless the Government is more understanding about the need for subsidies.

Now Ford is not exacly short of a dollar or two, being the world's most profitable car maker at present. It splashed out $6.5bn for Volvo and another pounds 1bn for Kwikfit without blinking and at one time had its beady eye on the Automobile Association.

Alan Michael, the first leader of the Welsh assembly, apparently did Bridgend no favours by going over to Detroit in March and telling Ford that there was no more money on the table beyond the pounds 30m offered.

Ford, however, is not the kind of company to take no for an answer. The big cheese, Jac Nasser, was due to have flown in to conduct the negotiations yesterday with Mr Blair. In the event, it was left to Ford's European president and its local UK chairman, Ian McAllister, to go along cap in hand.

There is a huge element of brinkmanship in subsidy negotiations of this type. Would Ford really close down Bridgend, which is reputedly one of its most efficient engine plants, and switch the investment to Cologne or Valencia, with all the extra expense that would entail, for the sake of perhaps pounds 10m-pounds 20m?

The fact is that the German and Spanish governments are not slow on the draw when it comes to devising aid packages and Ford knows it can play the three countries off against one another.

Mr Blair's case for refusing any extra aid is not helped by the Government's track record. He caved in when BMW threatened to close down Longbridge and promptly bunged the Germans another pounds 30m to keep the replacement for the Rover 200 in Britain. BMW said it had been studying a rival manufacturing location in Hungary but this seems to have been news to the Hungarians.

As for Ford, it has been down this road before. The previous administration was persuaded to cough up more state aid than it had been prepared to spend to ensure the baby Jaguar was built at Halewood.

In its favour, Ford has just agreed to invest pounds 300m of its own money to secure the future of Dagenham and make sure the next Fiesta comes out of the UK.

But then again, it is a very wealthy company. This time Mr Blair must be sorely tempted to say no but the likelihood of that is remote.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...

Recruitment Genius: Mortgage Administrator

£20000 - £25000 per annum: Recruitment Genius: We are a vibrant and establishe...

Day In a Page

Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent
Markus Persson: If being that rich is so bad, why not just give it all away?

That's a bit rich

The billionaire inventor of computer game Minecraft says he is bored, lonely and isolated by his vast wealth. If it’s that bad, says Simon Kelner, why not just give it all away?
Euro 2016: Chris Coleman on course to end half a century of hurt for Wales

Coleman on course to end half a century of hurt for Wales

Wales last qualified for major tournament in 1958 but after several near misses the current crop can book place at Euro 2016 and end all the indifference
Rugby World Cup 2015: The tournament's forgotten XV

Forgotten XV of the rugby World Cup

Now the squads are out, Chris Hewett picks a side of stars who missed the cut
A groundbreaking study of 'Britain's Atlantis' long buried at the bottom of the North Sea could revolutionise how we see our prehistoric past

Britain's Atlantis

Scientific study beneath North Sea could revolutionise how we see the past
The Queen has 'done and said nothing that anybody will remember,' says Starkey

The Queen has 'done and said nothing that anybody will remember'

David Starkey's assessment
Oliver Sacks said his life has been 'an enormous privilege and adventure'

'An enormous privilege and adventure'

Oliver Sacks writing about his life
'Gibraltar is British, and it is going to stay British forever'

'Gibraltar is British, and it is going to stay British forever'

The Rock's Chief Minister hits back at Spanish government's 'lies'
Britain is still addicted to 'dirty coal'

Britain still addicted to 'dirty' coal

Biggest energy suppliers are more dependent on fossil fuel than a decade ago
Orthorexia nervosa: How becoming obsessed with healthy eating can lead to malnutrition

Orthorexia nervosa

How becoming obsessed with healthy eating can lead to malnutrition
Lady Chatterley is not obscene, says TV director

Lady Chatterley’s Lover

Director Jed Mercurio on why DH Lawrence's novel 'is not an obscene story'
Farmers in tropical forests are training ants to kill off bigger pests

Set a pest to catch a pest

Farmers in tropical forests are training ants to kill off bigger pests