The Welsh Government will look to recoup the £4million it has already spent on Ineos’ planned ‘state-of-the-art’ vehicle factory in Bridgend after the car maker announced yesterday that it is considering shifting production to a site in France instead.
Ineos Automotive – owned by petrolchemicals billionaire Sir Jim Ratcliffe – confirmed on Tuesday that it is considering scrapping plans to build a car plant in South Wales, where production of the new Grenadier 4X4 was due to begin next year and 500 jobs created.
The Welsh Secretary of State told MPs that Ineos’ decision was linked the government’s ‘inability or unwillingness’ to upgrade the M4 motorway. However, that claim has been shot down by the minister for economy, transport and North Wales as ‘nonsense on stilts’, who went on to add that the decision was Brexit related despite Ratcliffe’s vocal backing for Britain to leave the EU.
Shelved: The South Wales plant would have created 200 new jobs initially, expanding to 500 once production ramps up. Ford’s due-to-close engine plant is the building you can see in the top left of this image
Ineos, which only revealed Grenadier – its first vehicle – a week ago, looks set to shift production of the utilitarian 4X4 across the Channel if it can acquire Damler’s Hambach factory in Moselle, France.
The Welsh site, which is close to Ford’s engine factory in Bridgend, looked set to provide around 200 jobs initially, increasing to 500 once the 4X4 reached full production volumes of around 25,000 units a year.
With Ford’s neighbouring facility, which employs around 1,700 staff, due to shut down this autumn, Ineos’ plans to bring vehicle production to the area was seen as a welcome boost for many skilled automotive workers seeking employment.
However, the intention to build the offroader in Britain now looks uncertain, as Ineos bosses consider a ready-made facility on the French and German border that is already setup for assembly of large-sized vehicles – despite it currently being used for the manufacture of the dinky Smart ForTwo city car.
Ineos Automotive commercial director, Mark Tennant, told This is Money that the car maker had spoken to the Welsh government about putting the Bridgend factory decision on hold days before releasing a statement this week.
Proposed UK automotive jobs could be scrapped: Ineos Automotive had previously said it will build its new Grenadier 4X4 at a new ‘state-of-the-art’ facility in Bridgend, Wales, but this week said it could switch production to France
The factory Ineos favours: German carmaker Daimler said on Friday it wanted to sell its factory in Hambach, France (pictured), near Metz and Saarbrücken, as it tries to cut costs.
He said the decision had been made as the availability of the Hambach factory has only recently come to light.
Welsh Secretary of State, Simon Hart, claimed Ineos’ actions were a direct result of limited investment in the M4 motorway, which would have been the main transport link for the facility.
Ken Skates, minster for economy, transport and North Wales, hit back in the Senedd today, stating: ‘Any suggestion that the M4 decision influenced Ineos is nothing more than nonsense on stilts.
‘The fact of the matter is the M4 decision was made in the summer of 2019 and the Ineos deal was secured in the autumn of 2019.
Ken Skates MSL Minister for Economy, Transport and North Wales
‘In four years of negotiations with the company, on not one occasion was the M4 raised.
‘It is as about credible a claim as the claim the UK Government’s failure and refusal to electrify the South Wales mainline may have influenced Ineos’s decision.
‘The fact of the matter is that a site became available in France very late last week and in a very short space of time the business decided to go to France rather than remain in Wales.’
Mr Skates confirmed that the government will look to recover the costs already paid out for preparing the proposed Bridgend site if Ineos does take up the option of Daimler’s French factory that’s been put up for sale.
‘We will be seeking to recoup the £4million that has been spent to date,’ he explained.
‘There is the slightest chance it will still come to Wales but it would require the deal in France to fall through.
‘We will go on working to ensure that as many job opportunities as possible come to Bridgend’s surrounding communities as possible.’
Billionaire owner, Sir Jim Ratcliffe, could face a public backlash if production of his first car is moved to France. The petrochemicals mogul has been a vehement supporter of Brexit
Sir James Dyson was forced to repay the British government £7.8million for a grant his firm had been provided in 2016 for his electric car project – on the proviso it would be a boost to the UK
Mr Skates said he was ‘extremely disappointed’ with the Ineos decision as the Welsh Government had invested ‘time, energy and money into this business’.
Former first minister Carwyn Jones, who represents Bridgend, suggested Brexit-supporting businesses had an ‘extra responsibility’ to invest in the UK.
‘Do you agree with me that those who are passionate Brexiteers should be angry at what has happened here because this undermines their passionately held belief that the UK will be better outside the EU?,’ Mr Jones asked.
The minister replied: ‘I agree entirely with Carwyn Jones and say that this decision is somewhat perplexing given the business in question is a supporter of Brexit and there is no doubt whatsoever that Brexit is doing immense damage to the automotive industry and the economy in general.
‘This disappointing news should be reflecting the poor performance of the UK Government in terms of negotiations with our European colleagues to date and should send a very real warning for the state of the automotive sector as we reach the transition period.’
The Grenadier offroader was only unveiled in full last week, revealing a shape very similar to that of the previous-generation Land Rover Defender
If Ineos does choose France over Britain, Sir Jim Ratcliffe – a hardened supporter of Brexit – could face a public backlash.
In 2018, Briton’s slammed Sir James Dyson – Britain’s richest man and another pro-Brexit supporter – when he announced intentions to move production of his ill-fated electric car from the UK to Singapore.
The electric SUV project was eventually shelved late last year after the entrepreneur said it was ‘not commercially viable’.
In January, Dyson was forced to repay the British government £7.8million for a grant it had been provided in 2016 for the car project on the proviso it would be a boost to the UK economy.
It was provided as the prospect of developing and building a plug-in passenger car was expected to bring an engineering and employment boom to the firm’s home town of Wiltshire.
Ineos said it has suspended the post-lockdown resumption of work at sites in Wales and Portugal pending a decision to take over the Hambach plant being sold by Daimler (pictured)
Ineos bosses said the adaptations already made to the production facility would be ‘ideally suited’ to build the new Grenadier 4X4
‘Decision not Brexit related’, says Ineos boss
Ineos bosses said the fall-out from the coronavirus has been a factor for the consideration to switch to the factory in France, but Brexit had not.
Mr Tennant insisted in an interview with This is Money that the opportunity of a ready-made site provided by Hambach was the driving factor in the consideration to move production away from the UK.
‘Brexit was not an issue,’ he said. ‘Brexit has not played a role.
‘We are looking to mitigate risk around timescale. There’s a lot up in the air about a second wave of Covid.’
Mark Tennant, Ineos Automotive commercial director
Months of inactivity at the Bridgend site had also been the cause of some speculation. The firm said that this has been caused by the lockown, which has delayed ground clearance work there by three months.
However, the choreography of unveiling the good news of the vehicle last week then the blow to South Wales today suggests to some in the industry a longer and more directed strategy.
Mr Tennant said: ‘The Grenadier has got to be a strong commercial proposition. We have to look at existing capacity. We’re still in negotiations.’
If the Hambach option is concluded, production in South Wales and another factory in Portugal will not go ahead, he confirmed. ‘It’s a binary decision,’ he explained,
It was ‘too early’ to talk about any compensation or otherwise to the Welsh authorities who were developing the wider site for businesses, he added.
Mr Tenant said he was confident that, despite the delays caused by coronavirus, production at the end of 2021 and first sales in 2022 would remain on schedule.
‘Our aspiration is still to start production at the end of 2021 and have the Grenadier on sale early 2022,’ he told us.
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