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The BBC's Stephen Evans
"It won't be the end of Dagenham as a whole"
 real 28k

The BBC's Jonty Bloom
"Today is likely to mark the beginning of the end"
 real 28k

Friday, 12 May, 2000, 06:13 GMT 07:13 UK
Dagenham to learn its fate
Workers at Dagenham
Ford employs 8,000 at Dagenham
Ford will tell unions later on Friday of plans for of a radical shake-up of its loss-making European operations.

The restructuring will include an end to car production at its biggest UK plant, Dagenham, with the loss of about 2,000 jobs.

Dagenham is going to continue forever - don't take this as we're pulling out of Dagenham

Jac Nasser, Ford chief executive

But the global car giant is intending to soften the blow by unveiling a series of other investments in the UK - and pledging that the new look Dagenham plant's future will be secured "forever".

Ford, the world's second largest carmaker, announced earlier this year that it would cut some 1,350 jobs at Dagenham and said further steps might be taken.

Its European operations have been struggling recently, hit by falling car sales and intense competiton.

Switch to Cologne

Ford had still planned to build some new Fiestas at Dagenham, Essex, from early 2002.

But at Friday's press conference Ford is expected to say it has decided instead to build the Fiesta at Cologne in Germany.

All Ford's European operations are expected to be affected by the announcements.

The company employs 105,000 people mainly in the UK, Germany, Spain and Belgium.

Ford announced plans last year to invest about 500m ($750m) in Dagenham, which includes the car maker's only high-volume diesel engine plant in the world.

Mr Nasser said: "Dagenham is going to continue forever. Don't take this as we're pulling out of Dagenham. We have no intention of doing that at all."

Political reaction

He also said the shake-up represented a "re-birth" for Dagenham.

His comments came at a news briefing following Ford's annual shareholder meeting in Atlanta at the city's zoo.

Friday's announcement comes just three days after Rover's giant Longbridge plant was saved from the brink of extinction when a group of British businessmen bought the loss-making car maker.

"Tomorrow's announcement will be a mixture of good and bad news. But what will be clear is that Ford will remain committed to the United Kingdom and we will still have Ford as a major employer in this country," UK trade secretary Stephen Byers told Parliament.

He took the opportunity to deny that Ford's move was the result of either the strength of sterling or the UK's employment laws.

Instead it was the "a result of overproduction in the European market".

A key factor, according to industry sources, is that Dagenham does not have two production lines, unlike other plants in Europe.

Big losses, below capacity

This means massive investment would be needed in Dagenham to introduce the new Fiesta while winding down production of the existing one.

Ford's need to shake-up its European operations has been forced by the fact that the division lost $55m last year.

Dagenham's assembly plant was built in 1931, and has been running far below capacity, producing 191,000 vehicles last year when it was designed to handle 278,000.

Ford builds the Fiesta car and Courier vans there, mainly for customers in the UK and Ireland.

Prime Minister Tony Blair has pledged the government will do "all it can" to protect jobs at the Ford car factory at Dagenham.

Extra cash elsewhere

A package of measures is being drawn up by the Department for Education and Employment to offer re-training and other help to the workers facing redundancy.

The future of the plant - which makes the Ford Fiesta and employs about 8,000 people - has been in doubt for some time.

The body plant at Dagenham could be in line for extra work and there is speculation of further investment at the engineering centre in Dunton, Essex, the Transit van factory in Southampton, and the engine plant in Bridgend, south Wales.

Ford, which employs 26,000 people in the UK, is reportedly planning to offer voluntary redundancies at its other UK plants to avoid compulsory lay-offs.

There are suggestions workers will be offered redundancy payments of up to 40,000.

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See also:

11 May 00 | UK Politics
Ministers bid to ease Ford blow
10 May 00 | Business
Rover looks to future
24 Apr 00 | Business
Unions pledge fight for Ford
18 Feb 00 | Business
Ford slashes 1,500 UK jobs
03 Feb 00 | Business
Ford's European troubles
10 May 00 | Business
Blair to fight for Ford jobs
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