A potential lifeline for Ford's engine plant in Wales is in danger of being cut after talks between the car maker and British billionaire Sir Jim Ratcliffe broke down last month.
Ratcliffe's chemicals giant Ineos was in discussions with Ford about manufacturing a new 4x4 at the Bridgend site, along the lines of the Land Rover Defender. But sources have told The Mail on Sunday that the two parties have not spoken for more than a month, with the deal currently off the table.
News of the stalled talks will concern Bridgend workers and union representatives, who are desperately seeking reassurances from the motoring giant amid fears the Bridgend plant could be closed when a contract to make Jaguar Land Rover engines comes to an end in 2020.
Ford recently cut 370 jobs in Bridgend, with a further 900 set to go by 2021. This would leave just 400 to 450 workers at the site and would raise questions about its viability, sources said.
Ford is expected to announce a series of cuts in the UK later this year as part of a wider shake-up to its European operations – and Bridgend is a key area of concern for unions.
Automotive industry sources suggested that Ineos could now be on the hunt for a different site in South Wales. There has been speculation that Ineos could buy a 70,000 square metre greenfield site owned by the Welsh government in Brocastle, adjacent to Ford's Bridgend site. This could offer a new livelihood to hundreds of Ford workers whose jobs are on the line.
However, there are concerns that Ineos, which was originally expected to announce its decision in late 2018, may now choose to assemble its new vehicle overseas. The firm was understood to be considering a site in Portugal, despite previously stating that it would prefer to make the vehicle in Britain.
Such a move would be controversial from Ratcliffe, a Brexiteer who recently came under fire over plans to move to tax haven Monaco. Vacuum cleaner entrepreneur Sir James Dyson, a fellow Brexit-supporting billionaire, was heavily criticised last year when he announced plans to make his new electric car in Singapore rather than the UK.
Ineos unveiled its plans – dubbed Projekt Grenadier – to make a new 4x4 after Jaguar Land Rover ceased production of its popular Defender model in 2016.
Ratcliffe, who recently took over the Team Sky cycling team, renaming it Team Ineos, and who has been linked with a deal for Chelsea Football Club, describes himself as a 'long-term admirer' of the Defender. In March, Projekt Grenadier struck a deal to share technology with German car giant BMW.
A spokesman said: 'Ineos Automotive can confirm it has not made any final decision on the location of its manufacturing plant.
'To build a world-class vehicle from scratch is a complex proposition, so we are determined to secure a world-class location. We hope to make further announcements soon.'
A spokesman for Ford said: 'While the Bridgend engine plant has a long-established and successful record in the delivery of world-class engines, the auto industry is undergoing rapid change.
'Together with our union partners, we continue to look at other high-technology opportunities for the future. We have nothing further to add at this time.'
A Welsh government spokesman said: 'We continue to work closely and constructively with Ineos, Ford and others to secure a future for the Bridgend site and its workforce.
'We are not party to conversations between individual businesses.'
The car industry has endured a torrid few years, prompted by a looming ban on diesel vehicles and Brexit uncertainty.
Investment in the industry, which supports more than 800,000 jobs across the UK, has plummeted in the past four years – from £2.5billion in 2015 to less than £600million last year.
Honda is preparing to cut 3,500 jobs and leave the UK altogether.
Nissan, which employs about 7,000 workers in the North East, has also recently cut jobs, and there are serious concerns that other firms in the automotive sector will follow suit.
Tycoons fight for car of the future
One is renowned for his vacuum cleaners, the other for chemicals and fracking.
But, like PayPal co-founder Elon Musk in the US, British billionaires Sir James Dyson and Sir Jim Ratcliffe are aiming to make an even bigger mark on the business world – by developing the next must-have cars.
Dyson, who courted controversy with his decision to make his electric car in Singapore, last week unveiled details of its unique design, above as seen by Autocar magazine, and is aiming to launch the model in 2021.
Ratcliffe hopes to reveal his new model – constructed under Ineos Automotive’s Projekt Grenadier brand – in 2020 before the 4x4s that are designed to replace Jaguar Land Rover’s Defender go on sale in 2021.
The British automotive industry is desperately hoping that Ratcliffe does not ‘do a Dyson’ by choosing to construct his car overseas.