As Ford prepare to close their Bridgend Engine Plant this year with the loss of about 1,200 jobs, the company has secured a UK Government underwritten £500M loan to support its Dagenham engine plant.
The guarantee covers 80 percent of a £625M loan from commercial banks to support the automaker’s substantial exports of engines and transmissions from Britain.
The guarantee will help Ford to increase investment in electrification and protect jobs at its sites in Essex and Dagenham, the UK’s Department for International Trade said in a statement.
“This financing will help to maintain Ford as a key UK exporter,” said Graham Hoare, chairman of Ford in Britain, in a statement.
About 85 percent of the engines and 100 percent of the transmissions the company builds in the UK are shipped overseas. The value of Ford’s UK exports, including machined engine components, is around 2.5 billion pounda annually, said the chairman.
Ford and other motor industry operations in the UK face an uncertain future, with the prospect of tariffs on sales to the EU looming in the event of a no-deal Brexit next year. They also face extra red tape in the form of customs declarations, separate regulatory regimes and proving the origin of their goods.
The threat of border chaos with the UK’s largest export destination is another concern, given the lack of readiness among traders for new paperwork requirements and companies’ Brexit preparations being hampered by the coronavirus.
Ford announced plans last year to close its engine factory in Bridgend, and said it was due to a collapse in global sales of the vehicles which took the engines despite investing hundreds of millions of pounds installing new low emission hybrid-capable engine lines less than a year earlier.