Motives revealed for Ford factory switch

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Confidential Ford documents have shed light on the decision-making process that ended production of the Ford Escort in Britain. The papers outline massive financial advantages in state aid and savings on redundancy costs by switching production of one of the world's most successful cars from Halewood, on Merseyside, to Germany.

A paper presented to a meeting of senior management last December, which decided to axe 1,300 jobs on Merseyside, outlines a pounds 45m saving in making British workers redundant and a potential gain of $38m (pounds 23m) in grants from the German government. It is not clear whether such state aid would be entirely legal under European competition laws.

The document discloses that these huge gains could be made despite higher labour costs at the German plant in Saarlouis.

The document, produced by a Ford think-tank and passed to The Independent, presents a scenario in which there were just 815 jobs losses at Halewood. It estimates an overall cost advantage of $79.2m in the years 1998-2001 despite increased labour costs of $27.3m.

While Ford has denied accusations of "social dumping", the paper presents a damning picture of the company's motives.

Union leaders are due to make a last ditch attempt tomorrow to persuade Jac Nasser, head of Ford's worldwide automotive operations, to change his mind. The company has decided to build the replacement of the Escort model at both Saarlouis and Valencia in Spain, which together with Halewood produce the current version of the Escort.