The company said that the proposed action is a necessary step to support Ford’s global business redesign and is part of the company’s strategy to create a more efficient and focused business in Europe.
“Creating a strong and sustainable Ford business in Europe requires us to make some difficult decisions, including the need to scale our global engine manufacturing footprint to best serve our future vehicle portfolio,” said Stuart Rowley, president, Ford of Europe. “We are committed to the UK; however, changing customer demand and cost disadvantages, plus an absence of additional engine models for Bridgend going forward make the plant economically unsustainable in the years ahead.”
Factors behind the proposed closure of Bridgend include significant underutilisation of the plant, driven by the impending end of engine production for Jaguar Land Rover, the cessation of the previous generation Ford GTDi 1.5-litre engine, and reduced global demand for the new generation Ford GTDi and Pfi 1.5-litre engine. At expected volumes, the plant also faces a cost disadvantage compared with other Ford facilities building the same engine.
Significant efforts to identify new opportunities have not been successful.
It is proposed that production of the new generation Ford 1.5-litre engine will end at the Bridgend facility in February 2020, with the manufacture of engines supplied to Jaguar Land Rover ceasing in September 2020, when it is proposed that Bridgend will close.
As part of its proposals, Ford also has provided details of a comprehensive plan with an enhanced separation programme for Bridgend employees. This includes helping employees with redeployment opportunities to other Ford sites in the UK and assisting with domestic relocation where possible, or supporting them to find new employers or pursue new opportunities, such as creating their own businesses or training for new careers.
“As a major employer in the U.K. for more than a century, we know that closing Bridgend would be difficult for many of our employees,” Rowley said. “We recognise the effects it would have on their families and the communities where they live and, as a responsible employer, we are proposing a plan that would help to ease the impact.”
Ford currently expects to record pre-tax special item charges of about $650 million in relation to the proposed closure of Bridgend. Approximately $400 million of the charges would be paid in cash and are primarily attributable to separation and termination payments for employees. Non-cash charges of approximately $250 million include pension expense and accelerated depreciation and amortization. Most of the pre-tax special item charges would be recorded in 2019, with the cash outflows occurring in 2020, and are part of the $11 billion in EBIT charges with cash-related effects of $7 billion the company expects to take in the redesign of its global business.
Ford’s Bridgend Engine Plant opened in 1977, and today employs around 1,700 employees, including nearly 400 who signed up to a voluntary separation programme earlier this year and will leave between May and December 2019.
Ford is committed to the UK, where it continues to be the passenger and commercial vehicle sales leader. Even after the proposed closure of Bridgend, Ford will remain a major employer with significant operations in the country.
Ford’s Mobility Innovation Office in London is developing future mobility solutions for Europe, while the Dunton Technical Centre in Essex is home to Ford’s European market- leading commercial vehicle business which is set to play an even more significant role in the future. Ford will continue to produce diesel engines at the Dagenham Engine Plant in east London, and transmissions at the Halewood Getrag Ford Transmissions joint venture on Merseyside.
Ford of Europe’s transformation strategy – Sustainable profitability
The company is working swiftly, with significant progress made, to create a sustainably profitable business in Europe. In addition to today’s announcement of the start of the consultation in Bridgend, key actions underway as part of Ford of Europe’s transformation strategy include:
Near-term actions to improve profitability and reduce structural costs
Parallel longer- term redesign initiatives include a more targeted vehicle line up within three customer-focused business groups – commercial, passenger and imported vehicles
Confirming 16 new electrified vehicles for Europe, with eight debuting in 2019
Leveraging relationships, including an alliance with Volkswagen AG, to support commercial vehicle growth
Voluntary employee separation programmes are expected to reduce in excess of 5,000 jobs in Germany, while more than 500 salaried employees have volunteered for packages in the UK
Consolidating Ford of Britain’s and Ford Credit Europe’s headquarters at the Ford Dunton Technical Centre in Essex, UK, to create a customer-centric technical hub.
Optimising the European manufacturing footprint and addressing underperforming markets/vehicles, including:
Ending C-MAX / Grand C-MAX production in Saarlouis, Germany, in June 2019
Shift reductions in Saarlouis and Valencia, Spain
Restructuring the Ford Sollers joint venture in Russia to focus on growing its commercial vehicle business; discontinuation of all passenger vehicle production in June 2019, with the closure of two vehicle assembly and one engine plant
Production at the Ford Aquitaine Industries transmission plant in Bordeaux, France, ends in August 2019.
Oliver Zipse, member of the Board of Management of BMW AG responsible for Production, stated during the ceremony: “The new plant in San Luis Potosi is an important pillar of the BMW Group’s global production strategy. We aim to achieve a balance in our production and sales in the different world regions. We want to strengthen our footprint in important and growing markets. Plant San Luis Potosi will significantly boost our regional production flexibility in the Americas. From here, we are delivering our locally produced BMW 3 Series Sedan to customers worldwide.”
The company has invested more than $1 billion in the new production location. The plant, which already employs 2,500 people, will have a capacity of up to 175,000 units per year once the ramp-up phase is fully completed.
San Luis Potosi will build the BMW brand’s most successful model series: the BMW 3 Series Sedan. In the company’s more than 100-year history, this iconic car has come to represent the heart of the brand, setting the standard for dynamic performance, efficiency and design.
The ceremony in San Luis Potosi was attended by guests including Dr. Alfonso Romo Garza, Head of the Office of the Presidency of the Mexican Republic; Dr Juan Manuel Carreras López, governor of the state of San Luis Potosi; Oliver Zipse, member of the Board of Management of BMW AG responsible for Production; Milagros Caiña-Andree, member of the Board of Management of BMW AG responsible for Human Resources and Labour Relations, and Dr Andreas Wendt, member of the Board of Management of BMW AG responsible for Purchasing and Supplier Network.
Head of Human Resources Milagros Caiña-Andree highlighted the BMW Group’s strong commitment to vocational education: “Our highly-trained employees form a strong foundation for our new BMW Group Plant San Luis Potosi and help us meet high quality standards for our premium products. Our dual vocational training programme is already in its fourth generation.”
At an innovative new training centre on the plant grounds, all new staff and apprentices are trained in the BMW Group’s latest production processes and technologies, based on the dual vocational training model. The centre is not just focused on expanding employees’ and apprentices’ technical skills, but also boosting motivation, enthusiasm and team spirit.
The plant is working with four technical institutes in this area and has already trained 250 apprentices in technical occupations.
Dr Andreas Wendt, member of the Board of Management of BMW AG responsible for Purchasing and Supplier Network: “We have a strong supplier base we can build on in Mexico, having sourced high-quality, technologically sophisticated and innovative products from here for more than ten years. Every BMW Group vehicle today already contains at least one part from one of our 220 Mexican suppliers. Our new plant will benefit from short supply routes and the high level of flexibility this gives our supply chain.”
The BMW Group has operated its own local purchasing office in Mexico since 2008. In 2017, the office relocated from Mexico City to San Luis Potosi, where it now employs 105 people. The BMW Group’s purchasing volume in Mexico reached $2.5 billion last year.
Focus on flexibility, digitalisation and sustainability
Hermann Bohrer, director of the Mexican plant: “The plant was designed from the start to allow us to respond quickly and flexibly to future model variants and production volumes. We use innovative Industry 4.0 technologies, including new automation solutions and modern assistance systems. Sustainability was also a major focus from the beginning – and we are setting new standards in this area.”
Latest Industry 4.0 technologies
The BMW Group used digital 3D plans during construction of the plant, both for the building itself and for the installation of equipment. During every phase of construction, architects entered specific information, such as location, dimensions and completion date into digital models. Digital 3D-scanning technology was also used during construction for the first time. Combining these two technologies allowed for real-time analysis of construction progress and cost-efficient modifications, providing the BMW Group with continuous planning reliability.
The new BMW Group plant is a pioneer in the field of intelligent maintenance. Smart Maintenance Assistant Software is being used for the first time, enabling proactive maintenance throughout the plant to be planned ahead of time, thereby increasing equipment availability. Service activities are based on current, intelligently organised system data instead of predefined maintenance intervals. Using smart devices such as tablets and smartphones, staff receive all relevant information regarding equipment status.
Various Industry 4.0 technologies are used, for example, in assembly, where screens have largely replaced paper throughout the assembly process. Two screens per takt provide staff with all the information they need – information which, in the past, was only available on paper. This digital job card is being used for the first time at the BMW Group plant in Mexico.
Robots and employees work directly alongside one another in engine pre-assembly, cooperating in a way which plays to the strengths of each. Robots have the power to turn the heavy convertor, while the employees have the manual dexterity to make the final adjustments to fit them together precisely.
New sustainability benchmarks
From the first full year of production, the facility in San Luis Potosi will be the BMW Group’s most resource-efficient plant.
Careful use of water resources is a primary sustainability objective. The site, with the production network’s lowest water consumption per vehicle produced, will be the BMW Group’s first paint shop to generate no process wastewater at all. The water needed for the painting process is reconditioned and reused.
The use of renewable energy sources ensures that the plant will be supplied with 100% CO2-free electricity in future. A solar energy plant on-site, covering an area of more than 70,000 m2, will produce part of the energy.
Production for the global market
The new plant in Mexico expands the BMW Group production network to a total of 31 locations. In line with the BMW Group’s Strategy NUMBER ONE > NEXT, this ensures the company has a flexible and efficient international production network, with a good balance of value creation between Europe, Asia and the Americas.
The new location in Mexico is another building block in this growth strategy. The country is a member of the NAFTA free-trade area with Canada and the United States. It also has a large number of free-trade agreements, including with the European Union and MERCOSUR, which make it easier to export cars and import supplied parts.
The NAFTA region in particular, with its consistently high sales volumes, is a key market for the BMW Group. Twenty-five years ago, the BMW Group opened its plant in Spartanburg, USA, and has since invested nearly $9 billion in the site. The company will invest a further $600 million there by 2021 to gear it up for future generations of the BMW X models. The number of jobs will increase in parallel to around 11,000. In total, the company supports almost 70,000 direct and indirect jobs in the US.
The BMW Group in Mexico
The BMW Group sales company in Mexico is celebrating its 25th anniversary this year. The local sales company is not only responsible for the Mexican market, but also manages the company’s business strategy for the whole Latin America region, covering a total of 28 countries. Delivering continuous growth, Mexico is the most important market in this region.
In 2018, the BMW Group sold a total of 25,090 vehicles (18,501 BMW, 6,589 MINI) in Mexico – an increase of more than 13% over the previous year.
Citing political obstacles - Renault is partly owned by the French government and the obvious reluctance of Nissan to agree to a merger, FCA said that while it remains: "Firmly convinced of the compelling, transformational rationale of a proposal that has been widely appreciated since it was submitted, the structure and terms of which were carefully balanced to deliver substantial benefits to all parties, it has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully."
After a lot of negotiation, a vote was taken, in which Nissan representatives abstained, the leftist CGT union voted against, and all other directors voted for it. When it was the French state representatives' turn to vote, they insisted that the vote be postponed, underlining the government's reluctance to endorse any move that would see its share diminish.
On June 3, the CEO of Nissan, Hiroto Saikawa said that the proposed merger, if it happened, would significantly alter the structure of Renault. "This would require a fundamental review of the existing relationship between Nissan and Renault," he said.
Industry observers generally see this as the beginning of further negotiations but some experts have said that there are insurmountable obstacles to the merger.
JLR has said that the move will support the advancement of electrification technologies, a central part of the automotive industry’s transition to an ACES (Autonomous, Connected, Electric, Shared) future.
Significant joint investment in research & development, engineering and procurement will provide the necessary economies of scale to support increased consumer adoption of electric vehicles
The strategic collaboration will build on the considerable knowledge and expertise in electrification at both companies. Jaguar Land Rover has demonstrated its leading technical capability in bringing the world’s first premium battery-electric SUV to market - the 2019 World Car of the Year, the Jaguar I-PACE, as well as plug-in hybrid models; and BMW Group bringing vast experience of developing and producing several generations of electric drive units in-house since it launched the BMW i3 in 2013.
The agreement is intended to enable both companies to take advantage of efficiencies arising from shared research and development and production planning as well as economies of scale from joint procurement across the supply chain.
A team of Jaguar Land Rover and BMW Group experts will engineer the EDUs with both partners developing the systems to deliver the specific characteristics required for their respective range of products.
The EDUs will be manufactured by each partner in their own production facilities. For Jaguar Land Rover this will be at its Wolverhampton-based Engine Manufacturing Centre (EMC), which was confirmed as the home for the company’s global EDU production in January of this year. The plant, which employs 1600 people, will be the centre of propulsion system manufacturing offering full flexibility between clean Ingenium petrol and diesel engines and electric units.
The EMC will be complemented by the recently announced Battery Assembly Centre at Hams Hall, near Birmingham, in supplying electrified powertrain systems to Jaguar Land Rover’s global vehicle plants.
Sources at the French carmaker's offices told us that the Board of Directors has decided to continue to study with interest the opportunity of such a combination and to extend the discussions on this subject.
There will no doubt be some complex negotiations within Renault and its Alliance partners, and also with the French government, who have a share in the carmaker, a share that could be diluted if a merger goes ahead.
The Board will meet again on Wednesday, June 5 at the end of the day.
The acquisition is part of Evergrande’s strategy to become a major player in the global electric vehicle (EV) industry, and paves the way for NEVS to deploy Protean Electric’s in-wheel electric drive technology, ProteanDrive, into its future products.
Protean Electric is an automotive technology innovator and world-leading developer of in-wheel motors (IWMs) and future propulsion solutions. Founded in 2008, Protean Electric has devoted over a million engineering man-hours to develop and validate its ProteanDrive in-wheel motor technology.
The business has over 160 patents globally across electric motor and power electronics design, control and manufacturability, with another 150 patents pending, and ProteanDrive motors are subjected to industry-leading test criteria to ensure they meet existing automotive standards.
Compared to conventional electrified powertrains, the highly-integrated ProteanDrive in-wheel motors offer improved powertrain efficiency and greater flexibility in vehicle design. The patented high-torque density ProteanDrive technology combines a direct drive electric motor and power electronics which can be utilised on a range of platforms, including passenger cars, light commercial vehicles, urban mobility vehicles and autonomous pods.
Protean Electric will continue to operate as an independent business under the Evergrande umbrella, developing future powertrain and mobility solutions to meet the needs of the market. Formally, Protean Holdings will now be merged into Virtue Surge, a subsidiary of NEVS. The acquisition will provide additional resources and business opportunities for Protean Electric, giving the company access to an even broader pool of skills, knowledge and experience, as well as a sizeable customer in NEVS.
Stefan Tilk, CEO of NEVS said: “Protean Electric is an exciting company with very competitive technologies. I am sure this acquisition will lead to many benefits for both NEVS and Protean Electric”.
KY Chan, CEO of Protean Electric said: “This exciting new agreement will enable Protean Electric to fulfil its global potential and to do so more rapidly. This acquisition will aid Protean Electric in establishing a strategic advantage in the new energy and mobility markets and bring in new expertise. Evergrande is a well-established and ambitious business, determined to make a mark in the clean mobility arena across the world. We look forward to working closely with the Evergrande and NEVS teams to deploy our technologies.”
NEVS is a Swedish electric vehicle manufacturer committed to shaping mobility to become more sustainable and smarter, designing and producing premium transportation solutions and electric vehicles.
In January 2019 Evergrande Health acquired a (51%) controlling stake in NEVS. In combining NEVS, Protean Electric and a number of other leading companies within the automotive area, Evergrande has formed a highly competent “New Energy Vehicle” group.
The production of the Haval F7 marks a significant milestone as the automaker's first full-process mass-produced vehicle manufactured overseas. The Haval F7 is also the first vehicle to leverage Chinese research and development on a multinational scale with full-process production conducted both in China and Russia, ushering in Haval's Globalization 3.0 era.
"With the Tula Factory, we are helping stimulate local economic development as part of the Belt and Road Initiative," said Wei Jianjun, Chairman of Great Wall Motor Company Limited. "I believe our globalization strategy has the potential to go beyond opening international markets - it will propel Haval to be a key player on the global auto stage."
With investment totalling over $500 million, the Tula factory is GWM's largest overseas investment project to date and China's first full-process offshore vehicle factory. With an annual capacity of 150,000 units, the factory covers all production stages including pressing, welding, painting and integrated assembly. The factory also has parts on-site and quality control will be conducted locally.
In line with Haval's vision to localize 65% of production, over 90% of the plant's 800 employees are local and is expected to grow to 1500 by June 2019. As Tula's most significant industrial project, the factory will boost the local economy by RMB 3 billion ($430 million) forecasted in domestic revenue and taxes. Products from the factory will also be exported to neighbouring countries, bolstering Tula's foreign exchange income.
The Tula factory heralds Haval's Globalization 3.0 era, leveraging the Belt and Road Initiative to champion sustainable development through global distribution while exporting China's manufacturing and technological advancements worldwide.
In addition to providing a full-process mass-scale factory to service the expanding Russian market, Haval's factory acts as a joint resource for other automakers with OEM parts, complete knock-down and assembly to reduce costs and minimize investment risks.
Located in Uzlova Industrial Park in Tula, Russia, the factory is strategically positioned near Russian economic hubs including Tula, New Moscow, and Moscow. Haval's factory will serve as a base for development into Central Asian and Eastern European markets, including the adjacent countries of Belarus, Kazakhstan and Moldova.