The world's two leading car groups, General Motors and Ford, yesterday delivered a much-needed vote of confidence in Britain by committing themselves to £440m investment in plants at Ellesmere Port and Bridgend.
Vauxhall, GM's British arm, which is ending car production at Luton next year with the loss of around 2,000 jobs, said it would invest £200m to build the new Vectra model on Merseyside, guaranteeing 1,200 existing jobs.
Ford, which is ending car assembly at its main Dagenham plant next year, is to put £220m into new engine facilities at Bridgend, south Wales. The move will create an extra 600 jobs in a region reeling from more than 3,000 job losses at the steel group Corus and hundreds more at smaller industrial companies.
Ford's investment has been sweetened by a grant of around £16m from the Welsh assembly whose offer of about £20m in financial aid to keep the bulk of the Llanwern steel works open was spurned by Corus last week.
Stephen Byers, the industry secretary, said the investment decisions were a vote of confidence in Britain and its workforce and showed there were underlying strengths in the country's manufacturing base.
Ford is to raise output at Bridgend by a third to 200,000 units a year by building new Durvec V6 and V8 petrol engines, primarily for the new small Jaguar being produced at Halewood, near Liverpool.
Ian McAllister, Ford UK chairman and managing director, said the grant - which is still to be approved by the European commission - had been an important factor but the Bridgend plant's "world-class" standards of efficiency and productivity had been determinant.
Rhodri Morgan, the Welsh assembly's first minister, said Ford's decision to expand Bridgend was an object lesson to Corus on how to run a business. Ford, he said, had shifted production from Cleveland, Ohio, to Wales but had initially given the American autoworkers' union 90 days to come up with counter-proposals.
"The American unions, which are losing jobs, knew they had an uphill struggle as the engine is destined for Halewood but understand they have had a fair play, compared with that outrageous decision of Corus," he said.
Mr McAllister made it plain that the investment was for the long term and was based on the assumption that Britain would "at some time" be a member of the euro zone.
Union leaders claimed that Vauxhall had timed its announcement to influence the company-wide ballot for industrial action to halt the closure of its Luton plant. The ballot result is due to be announced on Friday.
Tony Woodley, chief motor industry negotiator for the T&G, said the announcement was also timed to have an effect on the growing political support for the Luton workers.
"They [GM] are closing a British plant just to maximise and utilise capacity elsewhere," he said. "They are robbing product from Britain and moving it to other plants in Europe."
Capacity at Ellesmere Port is being increased from 166,000 to 180,000 cars a year. It will make both the current Astra and the new Vectra on the same production line, although main European production of both models will be at GM plants in Germany and Belgium.
