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Motor industry expert Professor Garel Rhys
"No manufacturer can afford such cross-subsidies"
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Saturday, 22 April, 2000, 10:50 GMT 11:50 UK
Ford 'to end production' at Dagenham
Ford Dagenham
Dagenham's future has been in doubt for months
Car giant Ford is set to end car production at Dagenham, its largest UK plant, putting 3,000 jobs at risk, it is reported.

The move will be announced in mid-May as part of a major restructuring that will affect other Ford European plants, according to the Financial Times.

Ministers must fight to the death to protect car production and jobs at the Dagenham plant

John Edmonds of the GMB trade union
Termination of car production at the Essex plant, which employs more than 7,700 people, is another blow to the UK motor industry - already reeling from the expected loss of thousands of jobs when BMW sells ailing Rover.

The GMB union said the move would be a catastrophe for Dagenham.

Ford declined to comment on the future of car assembly at the Essex plant, but told the paper that an announcement would be made in the next few weeks.

Dagenham's future has been in doubt for months. Managers have criticised poor productivity and the plant has been hit by unofficial strikes and allegations of workforce racism.

Falling profits

In February, Ford axed 1,500 jobs at Dagenham and warned it could take further steps to turn around its loss-making European car business.

Its profits in Europe fell sharply last year - from 200m to just 29m - and there is considerable overcapacity.

More than 4,000 people work on the car body and assembly operations
Intense price competition, the strength of the pound abroad and surplus capacity have undermined the competitiveness of Ford's operations in Britain.

Motor industry expert Professor Garel Rhys of Cardiff University said any move to close ythe plant could have been predicted in the past three months, since Dagenham switched to one shift due to overcapacity.

"Europe and Latin-America are two areas of the world where Ford is making considerable losses," he said.

"No manufacturer engaged in worldwide competition can afford to cross-subsidise one part of the world from another. So Ford needs to take pretty dramatic action in Europe to get rid of its long-term problem."

He said overcapacity of about 400,000 units was effectively an entire assembly plant.

Ford needs to take pretty dramatic action in Europe to get rid of its long-term problem

Professor Garel Rhys
John Edmonds, general secretary of the GMB trade union, said: "If these reports are true, it would be a catastrophe for Dagenham and for UK car production as a whole.

"However, we still believe that there is something to play for - ministers must fight to the death to protect car production and jobs at the Dagenham plant."

A spokesman for the Transport and General Workers Union (TGWU) said: "A great deal of rumour and speculation surrounds the current Ford review. Ford knows that Dagenham is an important part of its UK operations.

"The TGWU has argued strongly and made a number of representations to Ford management on this issue and we await the outcome of the review."

Cologne decision

The FT said Ford executives were expected to agree the restructuring plans at a meeting at its European headquarters in Cologne, early next month.

Of the Dagenham plant's 7,700 workers, 4,600 work in the car body and assembly operations.

Many assembly workers will lose their jobs, though others could be transferred to engine operations and an expanded press shop, the FT said.

A Department of Trade and Industry spokeswoman declined to comment on the FT report.

"We would not comment on speculation. It is a matter for the company," she said.

She added: "Obviously officials are in contact with all the big players in the motor industry and people are aware that there are difficulties at Ford."

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See also:

18 Feb 00 | Business
Ford slashes 1,500 UK jobs
03 Feb 00 | Business
Ford's European troubles
04 Feb 00 | Business
Is Dagenham doomed?
02 Feb 00 | Business
Ford staff vote for walkout
03 Feb 00 | Business
Ford to cut costs in Europe
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