Car production to end at Dagenham plant next year

Car producing rivals

Car assembly is to end next year at Ford's Dagenham plant with the loss of 3,000 jobs, senior company sources say.

The decision to phase-out production of the Fiesta model, likely to be announced tomorrow, will raise concerns that Ford may eventually close the complex, ending the company's 70-year link with Essex. However, to sweeten the pill Ford will announce a boost to investment in the engine and body facility at the plant.

Management is also likely to offer assembly workers enhanced redundancy entitlements averaging £50,000 each. Other employees will be allowed to transfer to other departments and Ford may also announce a financial aid package to soften the impact on the local economy. The announcement will be made from Ford's Detroit headquarters after the London Stock Exchange closes tomorrow.

The last car to be produced at Dagenham will run off the production line before November 2001 when the new Fiesta starts being produced at Ford's Cologne plant in Germany.

The closure of the assembly division at Dagenham is a blow to the regional economy, but workers had feared that Ford was to announce the closure of the whole complex with the loss of 9,000 jobs.

Management have already prepared for the phasing out of the Fiesta by reducing production at the Essex plant from two shifts to one.

The Dagenham factory had suffered, like other British manufacturers, from the strength of the pound, but it had also been hit by global over-capacity in the car industry.

The Dagenham plant made the Cortina and then in the 1980s its replacement, the Sierra. However, when the Sierra came to the end of its life cycle, the Essex factory was denied its successor, the Mondeo.

Ford made just £17m profit in Europe last year on an £18bn turnover, with profit margins on car sales of just 0.1 per cent. This contrasts with Ford's record global profits of £4.5bn.

Dagenham has improved its efficiency enormously in the past 10 years but is still not as productive as other European plants. It takes 25 per cent longer to build a Fiesta in Essex than in Cologne.