Ford has announced it will invest £230m in a Merseyside transmission factory to upgrade it to make parts for electric vehicles, in a significant fillip for northern England’s automotive industry.
The US carmaker’s investment will help maintain about 500 jobs at the plant in Halewood, Knowsley, which currently makes transmission systems for petrol and diesel vehicles. Ford will receive UK government support worth about £30m, according to a source with knowledge of negotiations.
By 2024 the lines at the factory will produce 250,000 electric drive units, components that include electric motors and power electronics, every year.
The global car industry is embarking on the biggest period of upheaval in its history as it moves from internal combustion engines to batteries, which produce zero direct exhaust emissions.
For the UK industry the transition has raised questions over the future of several automotive plants owned by foreign multinationals that produce petrol or diesel parts for cars. The workforce at Ford’s Halewood plant fell from 650 in 2019 to 500 through natural attrition.
Ford said in February that all the cars it sells in Europe will be electric by 2030. That matches up to the UK government’s plan to end the sale of pure petrol and diesel cars by 2030, and hybrids after 2035. The carmaker also intends to make two-thirds of commercial vehicle sales all-electric or plug-in hybrid by 2030.
Stuart Rowley, president of Ford of Europe, said Halewood would play an important part in its “very ambitious” plans, but said government action was needed to improve charging infrastructure. He also warned against a possible plan to cut the level of grants for electric cars.
“At Ford we’re all in,” he said. “In the industry we’ve made the decision, we’re going electric. But we need to significantly ramp up the infrastructure at home, in the workplace.”
Rowley also warned that shortages of computer chips that have dogged the global car industry for months are “here for a while, well into next year”.
Ford’s investment was welcomed by the government, the industry and Unite, a union representing workers at the plant. Investment in the UK car industry stalled after the Brexit vote in 2016 as carmakers awaited details of what trade barriers they would face.
Rowley said the Halewood deal was “underpinned by the UK-EU free trade agreement – that was critical”.
Kwasi Kwarteng, the business secretary, said the investment was “a huge vote of confidence in Britain’s economic future and our plans to ramp up electric vehicle production”.
Unite’s general secretary, Sharon Graham, said it was “excellent news” and added it was “absolutely imperative that the government does not see this investment as a one-off” and helps other factories to switch to electric.
Ford last year closed one UK engine factory, at Bridgend in south Wales, although it has committed to continuing production of diesel engines for its Transit vans in Dagenham, Essex.
Several other UK factories have won foreign investment commitments, including Nissan’s Sunderland plant, which will build batteries and electric cars, and Stellantis’ Ellesmere Port factory, which will shift production from Vauxhall Astra cars towards electric vans.