Ford workers threaten walkout over job losses

Firm announces end to production but, despite promised expansion in engine building, unions predict 5,000 staff will be laid off

Workers at Ford's biggest British plant last night threatened to walk out after it confirmed a decision to end car production at Dagenham.

Managers estimated 1,900 workers would be made redundant but employees' representatives said the figure disguised the true extent of job losses. Bill Morris, general secretary of the Transport and General Workers' Union, estimated that 5,000 people would leave the Essex plant.

Production of the ageing Fiesta model will cease in early 2002 and the new version will be produced in Cologne, Germany.

To mollify employees, managers unveiled the "most generous severance package in British manufacturing history". They said workers will qualify for up to £40,000 and argued that the net reduction of jobs would be 1,400. Ford also announced a £330m investment over five years in the Dagenham engine division.

But shop stewards in the assembly plant said there was a strong chance of industrial action. On Monday workers' representatives decide the next move amid signs that the company could face unofficial strikes next week.

Nick Scheele, Ford of Europe chairman, told a news conference the company was determined to cut costs by £1bn, with Britain bearing 40 per cent. He was satisfied it was the right decision, given that the European business was in a "totally unacceptable" situation. If Ford had not decided to end car production at Dagenham it would have jeopardised the company. Mr Scheele said the net job losses at Dagenham, including those announced earlier this year, would be 2,750.

He admitted that three years ago Ford promised a new car would be built at Dagenham but circumstances had changed. There was now considerable over-capacity in the industry generally. Mr Scheele said Ford remained "totally committed" to Britain as a manufacturing centre and would continue to employ almost 50,000 people, its biggest workforce in any European country. Mr Scheele said the strength of the pound was not a factor in Ford's review and he rejected union complaints that the decision was taken because it was cheaper to dismiss workers in Britain than elsewhere. The company was giving 22 months' notice of its intention to end production, far greater than the statutory period in any European country.

Car-making was ending at Dagenham rather than in Cologne because the German plant was more flexible. It was also cheaper to build in Cologne than Dagenham, though that had not played a part in the decision.

The company also disclosed plans for a £7.5m fund to help redundant workers find alternative employment and for the regeneration of the Dagenham area. The Ford management confirmed the establishment of a £9m design centre in London. There would also be "an opportunity" to secure further investment at Ford's Bridgend plant in South Wales.

Despite the sweeteners,Tony Woodley, chief TGWU car-industry negotiator, said he was deeply angry about Ford's plans. "They bear no relation to the current market demand for Ford cars. The British car market accounts for 28 per cent of Ford's total European sales, more than Germany and Spain put together. UK customers will ask the question why, when this is the case, are jobs going at Dagenham?"

Sir Ken Jackson, the general secretary of the Amalgamated Engineering and Electrical Union, said: "Ford has broken its word. The company promised car-assembly workers at Dagenham they would keep their jobs. We are very angry and will do all we can to reverse their decision."