This article is more than 1 year old

This article is more than 1 year old

Ford is planning to close its Bridgend engine plant, with the likely loss of about 1,700 jobs, in the latest blow to the embattled British car industry.

The company is meeting workers’ representatives at the south Wales plant on Thursday. A source with knowledge of the process said the plant would shut down.

The British car industry is facing a series of difficulties including a steep fall in demand for diesel vehicles and falling sales in China, previously a key growth market. At the same time, Brexit uncertainty has cast a pall over the industry, with the threat of tariffs on cars and parts travelling to and from the UK.

Ford is the latest in a string of international carmakers to seek to drastically reduce its UK operations this year. In February, Honda announced it planned to shut its Swindon plant in 2021 with the loss of 3,500 jobs, while fellow Japanese carmaker Nissan reversed a decision to build its new X-Trail vehicle at its Sunderland plant.

Jaguar Land Rover, owned by India’s Tata Motors, is also cutting thousands of jobs. JLR, which runs the largest British carmaking operation, has come under pressure from a slump in sales in China.

Ford’s planned closure of Bridgend, which was first reported by ITV News, comes amid steep cost-cutting at the US carmaker. In January, Ford announced widespread job losses across its European operations, saying it would consider closing plants. Last month, it announced plans to cut about 7,000 jobs worldwide, or 10% of its global salaried workforce, including about 550 in the UK.

The overhaul across Europe, which included shutting down loss-making vehicle lines, has already resulted in the combination of the headquarters of Ford UK and Ford Credit to a site in Dunton, Essex, in an attempt to cut costs.

Ford runs three factories in the UK, including a diesel engine plant in Dagenham, east London, and a plant making transmissions in Halewood, on the outskirts of Liverpool.

A Ford spokesman refused to comment on the closure plan, saying it was “speculation”.

The Bridgend plant has manufactured engines since 1980. However, the plant, which sends petrol engines to Ford factories across Europe, was thought to be particularly at risk because a contract to manufacture engines for JLR will end this year.

The company has also been outspoken about the risks to the sector posed by Brexit. Ford’s European president, Steven Armstrong, warned that “nothing would be off the table” if the UK left the EU without a trade deal.

Union representatives were told earlier this year that the company planned to cut 1,000 jobs in the UK over two years, including more than half the workforce in Bridgend.

A spokesman for Unite, which represents many of the workers in Bridgend, said: “Unite will be meeting Ford first thing tomorrow morning and will comment further once the details of any announcement are known. Our priority is our members’ jobs, the communities and livelihoods in the supply chain that Ford Bridgend supports.”

Rebecca Long-Bailey, the shadow business secretary, said the government must meet Ford urgently to secure the plant’s future.

“This is worrying news, first and foremost for Ford employees and their families who are left unsure as to their futures, but also for the jobs across the supply chain and the impact on the local economy in Bridgend,” she said.

“Hot on the heels of Honda this would be another devastating blow to our car industry and to the UK’s wider manufacturing base.”

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Bethan Sayed, a Plaid Cymru member of the Welsh assembly, said there was “no disguising or minimising the damage a closure will do”.

She said: “The Bridgend plant is a hallmark of the Welsh industrial landscape and a flagship anchor company with a highly skilled and specialised workforce.”

A spokesman for the Department for Business, Energy and Industrial Strategy said the government would not comment on speculation.