Ford announces plan to close UK foundry

In March 2007, the Ford motor company announced that it will close its foundry in Leamington Spa in Warwickshire in July with the loss of 365 jobs. According to the company, the plant, which makes parts for Ford vehicles, had become uncompetitive. The trade unions declared their opposition to the closure, but workers voted not to take industrial action and to accept the enhanced pay-offs offered by the company to maintain uninterrupted production until the site closes in July.

On 29 March 2007, the Ford motor company announced its intention to close its foundry in Leamington Spa in central Warwickshire with the loss of 365 jobs. The plant will cease production on 21 July 2007. There will be no compulsory redundancies, with employees being offered the choice of early retirement, voluntary redundancy or relocation to another Ford site, as well as enhanced pay-offs if they maintain uninterrupted production until the site closes.

Leamington’s Labour Party Member of Parliament, James Plaskitt, declared that Ford’s decision to close the plant was ‘a kick in the teeth’ for its workers. The MP spoke of his dismay at hearing the announcement, having met the Ford Europe Chief Executive, John Flemming, in the German city of Cologne in February to plead the plant’s case.

Management claims plant ‘uncompetitive’

Ford stated that the foundry, which it has owned since 1940, was making annual losses of over GBP 10 million (about €14.6 million as at 3 April 2007). The plant makes brakes and disks for small cars, a market in which Ford faces intense competition from Asian and eastern European producers. According to the Financial Times, production will be moved to the Czech Republic, Serbia, Turkey and other countries with cheaper production costs.

The closure announcement follows the plant’s failure to win a new contract to make brake castings for the new Fiesta model. A Ford spokesperson emphasised that, in 2004 and 2005, the company had proposed cost-cutting programmes to the hourly paid workforce, but that these had been rejected. According to the company representative, ‘Ford’s Leamington foundry operates within a competitive global market. The plant’s high cost base has long been a cause for concern.’

Trade union reaction

In the opinion of the Transport and General Workers’ Union (T&G), ‘Ford workers in Leamington are being effectively bribed with enhanced payments to accept the closure of a plant which is one of the most productive in Europe’. The trade union’s National Secretary for the automotive industry, Dave Osborn, stated: ‘The T&G does not accept this closure is either inevitable or non-negotiable and we will do all we can to reverse the decision’.

Roger Maddison, National Officer at Amicus, argued: ‘Again, a major employer has made a decision to close a UK plant without proper consultation’. T&G declared that it was prepared to hold a strike ballot across Ford’s UK plants if its Leamington members voted for industrial action to try to overturn the closure decision.

Plant convenor Chris Kenny told a local newspaper that the workers were ‘very angry and morale is very low, but we are trying to keep it up by fighting to keep the foundry open’. He hoped that staff at the plant would vote to strike and that Ford workers in other UK plants would also take industrial action to help save the foundry. ‘If Leamington takes action, then all the Ford sites in the UK will join in. It would cost them millions [and] bring them to their knees’.

Strike action rejected

However, the Leamington employees voted overwhelmingly not to strike and instead to accept the financial package offered by the company. A Ford spokesperson told the Leamington Observer: ‘The result of the vote indicates we will be able to move forward with a smooth closure of the plant – which is something that is important for employees as well. The result also shows that workers recognise the company is doing its best to treat them fairly.’

Mark Hall, IRRU, University of Warwick

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