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New Transit might not be built at Ford's Southampton plant

5:02pm Wednesday 16th July 2008

comment Comments (43)   Have your say »


FORD'S giant Southampton plant could lose the contract to build the next generation of Transit because its costs are millions of pounds too high, the Daily Echo can reveal.

Company minutes leaked to this newspaper show bosses warning that the factory was at a "critical point in its history"

and that the new Transit "could be built elsewhere".

The revelations come just days after the Daily Echo revealed that the plant, which employs 1,243, could lose the work overseas and see the workforce cut back.

In a bid to cut costs, which are more than £6m over budget, the minutes reveal bosses have even considered slashing wages for new staff.


Click here to read the minutes in full.


But despite the suggested pay cut, management claim in the documents that people would "still be desperate to come and work at Ford".

They also add that a further range of unspecified "drastic actions" had been considered to save money.

But, the minutes say, these were rejected because they were "completely unpalatable" and would not make "sufficient savings".

The details on the state of the plant were revealed in the minutes of a meeting of its Special Joint Works Committee last month.

In them plant manager Martin Chapman says it is important for the company to be transparent about all plans discussed even if they are later rejected.

The minutes don't give any more detail on what these plans were or what the final proposals are.

When the Daily Echo contacted Ford, a spokesman said the company would not make any comment.

He said: "These minutes concern a private and professional meeting and we would not be responding to a media inquiry about them.

"This closed meeting was held prior to the Employee Bulletin that was put out - that is the newest and most up to date information for the workers."

According to the minutes Mr Chapman says the final plans will need more investigation and that "some of these proposals will represent a challenge for some people".

The three-page draft of minutes came to light after the Daily Echo exclusively published a leaked memo that cast doubt over the future of the plant and its workers.

Many employees told the Daily Echo they had been told production could be cut from 80,000 to 35,000 vehicles a year, with the additional work going to the Kocaeli plant in Turkey.

These concerns were fuelled by news that a new Ford plant at Craiova in Romania would start making Transit Connects in 2009 - a year before work is to begin on the new model Transit.

Workers fear this plant could be used to free up space and resources at the Turkish plant, which currently produces Transits and Transit Connects.

After the Daily Echo article appeared Southampton Test MP Alan Whitehead raised the issue in the House of Commons and demanded top-level Government talks while local council bosses vowed to do all they can to encourage Ford to stay in Swaythling.

In the leaked minutes Mr Chapman talks to 20 other people in attendance - committee members and staff representatives - about cutting the starting salary for new recruits.

He said: "There was no reason why we should not look at what we could do with contractual terms of new employees who would still be attracted to working at Southampton plant even on lower rates than existing employees."

The minutes also record the h u m a n resources manager Rob Ardley said: "Good quality workers would still be desperate to come and work at Ford."

Unite union regional officer Mike Budd told the committee that creating a two-tier would create problems.

He added that it was unrealistic to expect the plant to compete with labour rates of other Ford plants in Turkey or eastern Europe.

The minutes go on to state that Mr Chapman said the plant's current performance is unacceptable and that if it does not improve it may not get the contract for the new Transit in 2010.

When approached by the Echo Mr Budd refused to comment on the issues brought up in the minutes as he said they were the records of a private meeting.

Union chiefs are meeting with Ford bosses for top-level talks later this week and will be reporting back to shop stewards on Monday.

  • See today's Daily Echo for the full story.

Your Say YourThis is Hampshire

Anon, says...
9:29am Wed 16 Jul 08

i bet those that went on strike for more pay are not so clever now.

Ciaran, says...
9:34am Wed 16 Jul 08

Anon wrote:
i bet those that went on strike for more pay are not so clever now.
There hasn't been a strike at the Transit plant for almost 20 years...

Anon, says...
9:41am Wed 16 Jul 08

Ciaran wrote:
Anon wrote: i bet those that went on strike for more pay are not so clever now.
There hasn't been a strike at the Transit plant for almost 20 years...
plenty of threats and demands for up to 15% pay rises thou

Anon, says...
9:45am Wed 16 Jul 08

Ciaran wrote:
Anon wrote: i bet those that went on strike for more pay are not so clever now.
There hasn't been a strike at the Transit plant for almost 20 years...
Shouldnt be one ever.

wasp, says...
10:08am Wed 16 Jul 08

Anon wrote:
Ciaran wrote:
Anon wrote: i bet those that went on strike for more pay are not so clever now.
There hasn't been a strike at the Transit plant for almost 20 years...
plenty of threats and demands for up to 15% pay rises thou
Which makes your 1st post look rather stupid !

Anon, says...
10:15am Wed 16 Jul 08

wasp wrote:
Anon wrote:
Ciaran wrote:
Anon wrote: i bet those that went on strike for more pay are not so clever now.
There hasn't been a strike at the Transit plant for almost 20 years...
plenty of threats and demands for up to 15% pay rises thou
Which makes your 1st post look rather stupid !
it was the 10% pay rise that they settled for that has priced them out thou. the turks we do if for less in a brand new purpose built factory.

Osama Bin Laden, A Cave far far away says...
10:38am Wed 16 Jul 08

Don't worry guys I have seen how single mums and illegal suicide bombers live, its a good life with lots of money, so Don't feel ashamed about signing on

hulla, baloo says...
11:26am Wed 16 Jul 08

Why is the issue being raised in Parliament, and with Council bosses?
It is a major company trimming costs and streamlining its operation to be more profitable.
Given the option, I would think most manufacturers would consider, or be doing the same.

Fred, Here says...
11:32am Wed 16 Jul 08

hulla wrote:
Why is the issue being raised in Parliament, and with Council bosses? It is a major company trimming costs and streamlining its operation to be more profitable. Given the option, I would think most manufacturers would consider, or be doing the same.
Because its due to this government that manufacturing is being driven out and businesses find working in the UK not as profitable as less taxed countries such as Turkey.

As has been mentioned before there are plenty of other companies who have gone the same way.

southy, redbridge says...
11:38am Wed 16 Jul 08

Anom said "it was the 10% pay rise that they settled for that has priced them out thou. the turks we do if for less in a brand new purpose built factory."
the turks will not be building transits for europe,they are not a member of the EU,and would be subject to the anti flooding laws whitch will push the price up,pricing them selfs out of the van market in europe,turkey will not be allowed to join the EU till it pulls out all of their troops and people it relocated there,and hand back the land it took from greece in 1974 (cyprus),turkey is just a smoke screen,for some thing else.

southy, redbridge says...
11:41am Wed 16 Jul 08

fred said "Because its due to this government that manufacturing is being driven out and businesses find working in the UK not as profitable as less taxed countries such as Turkey.

As has been mentioned before there are plenty of other companies who have gone the same way"
its poor mangerment not the goverment or work skills,and if your going to blame a goverment blame the 1979 to 1989 goverment thats the goverment that screwed up the system.

hulla, baloo says...
11:45am Wed 16 Jul 08

Fred wrote:
hulla wrote: Why is the issue being raised in Parliament, and with Council bosses? It is a major company trimming costs and streamlining its operation to be more profitable. Given the option, I would think most manufacturers would consider, or be doing the same.
Because its due to this government that manufacturing is being driven out and businesses find working in the UK not as profitable as less taxed countries such as Turkey. As has been mentioned before there are plenty of other companies who have gone the same way.
Not just the Government.
Energy costs going up, food prices go up and general household expenses go up, for which the workers demand more money.
The company tries to save costs by changing shifts and working patterns etc but the Unions get involved, cannot always see the bigger picture and disrupt, or threaten to, with strikes and more pay.
Maybe the associated costs of taking to docks, exporting to continent etc is also a factor.
Lets fact it, the UK is, for everybody, a very expensive country to live in, with little to show for it.
Am only surprised Ford have not done this before.

southy, redbridge says...
12:11pm Wed 16 Jul 08

i would not be surprize it the transit went back to germany,gwet is deffently on the cards for the transit.and the southampton plant will probley end up making some thing else.

Steve, outers says...
12:48pm Wed 16 Jul 08

Anon wrote:
i bet those that went on strike for more pay are not so clever now.
Although Southampton is a productive and profitable plant, it is true wage costs in Eastern Europe are lower.
In fact, even if our pay was reduced to the level of the legal minimum wage it would still be in excess of the remuneration received by our colleagues in Turkey and Romania.
Pay is not the only cheaper overhead. The UK has some of the most expensive Energy costs in Europe. Turkey and Romania has the lowest. Corporation Tax in the UK is 28%, in Romania it is 16%. Most of Southampton's stock is sourced from Eastern Europe and every increase in the cost of oil is an increase in the costs of shipping the parts over here.
These are all costs that Ford workers are unable to do anything about.
Of course, we have made savings by adopting efficient working practices but as fast as we make savings they are matched by our sister plant in Turkey. As one manager here put it. "We have to run bloody hard just to stand still"
The company seem to have an unassailable case for moving the work abroad, however...
It should be remembered the UK is Ford's main market for the Transit.
Relocating Transit production to Eastern Europe might have seemed like a good idea when there was strong demand and oil was <$50 bbl.
It won't seem such a good idea when we have, falling demand and oil at $200 bbl. Eastern Europe is not inflation proof, costs are rising fast there.
Always late to any party, Ford has picked the wrong point in the business cycle to transfer production from the UK.
Quite simply, they have already missed the 'off-shoring' boat.
One other point to consider is that Turkey's cheap source of energy are power stations fired with gas piped in from Iran.
Iran is suspicious of Turkey's close ties with the USA. (The USAF has forward airbases there) Last year, by way of a warning, Iran cut off the supply of gas to Turkey for 2 days which stopped production at the Kocaeli Transit plant.
How long would Iran be happy to continue supplying an American company with cheap power in the event of current tensions between it and the USA escalating into something more tangible?
I hope the Management and Union at Southampton continue to put the long term business case to the company for continued investment, geared to demand, in the relatively stable UK home market, and that the Union will ballot the workforce at the earliest opportunity if the company cannot be dissuaded from the potentially disastrous course of action they appear to be hell-bent on pursuing.

Bambi, says...
1:01pm Wed 16 Jul 08

Osama Bin Laden wrote:
Don't worry guys I have seen how single mums and illegal suicide bombers live, its a good life with lots of money, so Don't feel ashamed about signing on
Illegal suicide bombers, you say? Is there any other kind?

mischiefmaker, says...
1:05pm Wed 16 Jul 08

Hey ! It would be an excellent site for an Ice Rink :-))

Paramjit Bahia, Southampton says...
1:07pm Wed 16 Jul 08

southy wrote:
fred said \"Because its due to this government that manufacturing is being driven out and businesses find working in the UK not as profitable as less taxed countries such as Turkey. As has been mentioned before there are plenty of other companies who have gone the same way\" its poor mangerment not the goverment or work skills,and if your going to blame a goverment blame the 1979 to 1989 goverment thats the goverment that screwed up the system.
You are right the root cause of many problems can be traced back to the Thatcher era. But although she has gone her policies have been adopted by New Labour, so the mess we are in.

Other problem is Ford itself. Like most American giants it is running into financial problems all over, has even lost major share of American market. This only leads me to think that lack of vision and arrogance of management that killed major British car companies is now catching up with America's Ford and General Motors etc.

Other problem is the EU into which we were hoodwinked by another Tory Ted Heath, and also another Conservative folly that has been hugged by New Labour.

Yes it can be argued that Turkey is out side the EU, but then isn't Brown the Bean supporting their request for EU membership? Cowboy in the White House has also been suggesting that it will be good for the EU as well.

Could it be that Ford is planning ahead with the knowledge that our elected representative are more likely to implement the agenda of big corporations then than interests of ordinary people, so Turkey will eventually be in the EU?

Must go. Have to show some solidarity with Council workers on picket lines. That is if they are still there!

southy, redbridge says...
1:16pm Wed 16 Jul 08

Paramjit Bahia said "Yes it can be argued that Turkey is out side the EU, but then isn't Brown the Bean supporting their request for EU membership? Cowboy in the White House has also been suggesting that it will be good for the EU as well."
brown cant support turkey entry into europe because greece is allied to the uk.and that bond was sealed with the marriage of queen and prince phillip.

Lowe and Behold, St Marys hotseat says...
1:38pm Wed 16 Jul 08

Paramjit Bahia wrote:
southy wrote: fred said \"Because its due to this government that manufacturing is being driven out and businesses find working in the UK not as profitable as less taxed countries such as Turkey. As has been mentioned before there are plenty of other companies who have gone the same way\" its poor mangerment not the goverment or work skills,and if your going to blame a goverment blame the 1979 to 1989 goverment thats the goverment that screwed up the system.
You are right the root cause of many problems can be traced back to the Thatcher era. But although she has gone her policies have been adopted by New Labour, so the mess we are in. Other problem is Ford itself. Like most American giants it is running into financial problems all over, has even lost major share of American market. This only leads me to think that lack of vision and arrogance of management that killed major British car companies is now catching up with America's Ford and General Motors etc. Other problem is the EU into which we were hoodwinked by another Tory Ted Heath, and also another Conservative folly that has been hugged by New Labour. Yes it can be argued that Turkey is out side the EU, but then isn't Brown the Bean supporting their request for EU membership? Cowboy in the White House has also been suggesting that it will be good for the EU as well. Could it be that Ford is planning ahead with the knowledge that our elected representative are more likely to implement the agenda of big corporations then than interests of ordinary people, so Turkey will eventually be in the EU? Must go. Have to show some solidarity with Council workers on picket lines. That is if they are still there!
Do you always have to write a story?

lol, says...
1:40pm Wed 16 Jul 08

Bambi wrote:
Osama Bin Laden wrote: Don't worry guys I have seen how single mums and illegal suicide bombers live, its a good life with lots of money, so Don't feel ashamed about signing on
Illegal suicide bombers, you say? Is there any other kind?
Dead ones?

Fact Man, here says...
1:47pm Wed 16 Jul 08

southy wrote:
Anom said "it was the 10% pay rise that they settled for that has priced them out thou. the turks we do if for less in a brand new purpose built factory." the turks will not be building transits for europe,they are not a member of the EU,and would be subject to the anti flooding laws whitch will push the price up,pricing them selfs out of the van market in europe,turkey will not be allowed to join the EU till it pulls out all of their troops and people it relocated there,and hand back the land it took from greece in 1974 (cyprus),turkey is just a smoke screen,for some thing else.
Cyprus did not belong to Greece when invaded by Turkey.

interested party, Soton says...
1:49pm Wed 16 Jul 08

I believe that if this happens, then of course it will be a terrible shame for all those involved, regardless of where the location of the factory will be. Turkey seems likely, according to this, and from a purely business point of view, then why not! In relation to Turkey joining the EU, that is also highly likely at some point in the relatively near future, my understanding is that Turkey is currently a candidate country. The idea of the EU is based on a free trading area, originally established as the European Coal and Steel Community as a trading bloc to protect European interests from America at the end of WWII. If Turkey can prove that she can compete on a level economic playing field with the rest of the EU, many countries of which are a great deal 'poorer' than Britain, then she will be allowed to join. I understand there are some issues relating to human rights, but as with many things, then my understanding is that business and economic stability is a pre-requisite for joining, fair and just human rights being a bonus.

interested party, Soton says...
1:50pm Wed 16 Jul 08

I believe that if this happens, then of course it will be a terrible shame for all those involved, regardless of where the location of the factory will be. Turkey seems likely, according to this, and from a purely business point of view, then why not! In relation to Turkey joining the EU, that is also highly likely at some point in the relatively near future, my understanding is that Turkey is currently a candidate country. The idea of the EU is based on a free trading area, originally established as the European Coal and Steel Community as a trading bloc to protect European interests from America at the end of WWII. If Turkey can prove that she can compete on a level economic playing field with the rest of the EU, many countries of which are a great deal 'poorer' than Britain, then she will be allowed to join. I understand there are some issues relating to human rights, but as with many things, then my understanding is that business and economic stability is a pre-requisite for joining, fair and just human rights being a bonus.

southy, redbridge says...
2:10pm Wed 16 Jul 08

Fact Man wrote:
southy wrote:
Anom said \\\"it was the 10% pay rise that they settled for that has priced them out thou. the turks we do if for less in a brand new purpose built factory.\\\" the turks will not be building transits for europe,they are not a member of the EU,and would be subject to the anti flooding laws whitch will push the price up,pricing them selfs out of the van market in europe,turkey will not be allowed to join the EU till it pulls out all of their troops and people it relocated there,and hand back the land it took from greece in 1974 (cyprus),turkey is just a smoke screen,for some thing else.
Cyprus did not belong to Greece when invaded by Turkey.
it did it was a self governed island belonging to greece or esle greece would not of got involed

southy, redbridge says...
2:19pm Wed 16 Jul 08

fact man cyprus is a dependency of greece,like the falklands islands is to britain.and the fact turkey remains in cyprus is why they are getting refused entry in to the EU.

dave, Millbrook says...
3:39pm Wed 16 Jul 08

Why doesn't the government step in and subsidize it.Let's face it they already subsidize plenty of other private businesses including BAE,Virgin Trains,Banks,thousan
ds of farmers etc.Can't see what the difference is myself!

Spiv, Swaythling says...
5:18pm Wed 16 Jul 08

See you lazy *astards in the dole office!Cheap labour is about to take your place.

Denzil, Hampshire says...
5:37pm Wed 16 Jul 08

Oh Well its only a rusty old Ford. There are plenty of better makes of van to choose from.

ex Bacardi staff, southampton says...
5:57pm Wed 16 Jul 08

Having worked for Bacardi Martini for many years until the plant closed. I can see this is going the same way as Bacardi did. The same things were said to us, but in the end the cost cutting that bacardi done did not help and the plant is now history.

jim, Southampton says...
7:05pm Wed 16 Jul 08

You all forget that the cost of living in Turkey, Romania and any other country in the world, not considered "first world" have payment schemes that mirror the financial situation in the country at that time. For example, a lot of companies have relocated to Egypt due to low wages, low energy costs etc, because the only thing they eat is bread, which is becoming too expensive. In countries like UAE there are large companies operating there because they have the oil to back up the wages. Its standard Socio-Politics and i suggest you read a book such as Eileen Riesler before you all complain about why this company goes there and that company goes over there. The UK has a wage structure that does not reflect the standard of living, otherwise people would have an addiction to credit card spending.

southampton resident, says...
7:23pm Wed 16 Jul 08

I wonder why the costs are so expensive, what with the ridiculously high red tape 'elf and safety costs etc forced upon businesses in this country by the stupid government made up of people who have neverhad to work in the private sector or in a competitive environment. This is the thin edge of the wedge.Unfortunaltely this country is finished, thank you nulabour!!!!!

Fred, says...
9:32pm Wed 16 Jul 08

Ciaran wrote:
Anon wrote: i bet those that went on strike for more pay are not so clever now.
There hasn't been a strike at the Transit plant for almost 20 years...
And the plant only really started making transits in 1972 when production was moved from Langley. Change happens.

Ford workers created a huge distortion in the economy when they went on strike in the late-70's and got awarded a very high pay rise. This latest news is just the cumination of the slow suicide of the manufacturing sector - too slow to automate and inflexible trade unions.

Bob444, Southampton says...
9:38pm Wed 16 Jul 08

This is typical of the U.S. We bend over backwards to help them out and put business their way (e.g., the British schools' SATs were organised and marked by a U.S. company - they then made a mess of it) and they put our workers on the dole (soon will, anyway).

The next U.K. census will be done by a U.S. company - can they be trusted with our information, or is it just another Big Brother exercise?

We are supposed to be in Europe now, so maybe it's time to cut free from the Yanks.

We don't want to be drawn into any more of their wars either.

Sheitma Pance, Soton says...
10:39pm Wed 16 Jul 08

southy wrote:
fred said "Because its due to this government that manufacturing is being driven out and businesses find working in the UK not as profitable as less taxed countries such as Turkey. As has been mentioned before there are plenty of other companies who have gone the same way" its poor mangerment not the goverment or work skills,and if your going to blame a goverment blame the 1979 to 1989 goverment thats the goverment that screwed up the system.
Typical New labour tactic, this!

Do you labour-ites SERIOUSLY think the public are stupid enough to believe this? If so, you seriously underestimate the intelligence of the British public, and you do so at your peril!

The tactic: Blame the Government of the 1980's for the problems encountered some 20 years later.

Sorry, it won't wash. The problems of today were caused by New labour; they have no one to blame but themselves.

Sheitma Pance, Soton says...
10:44pm Wed 16 Jul 08

southampton resident wrote:
I wonder why the costs are so expensive, what with the ridiculously high red tape 'elf and safety costs etc forced upon businesses in this country by the stupid government made up of people who have neverhad to work in the private sector or in a competitive environment. This is the thin edge of the wedge.Unfortunaltely this country is finished, thank you nulabour!!!!!
Why? Simple!

Some of the longer serving staff are paid approaching £40K per year to simply bolt wheels on transit vans, that's why!

Ford should sack all the "old school" staff and replace them with labour from abroad on a sensible wage. That's the only way to save the plant.

Sheitma Pance, Soton says...
10:46pm Wed 16 Jul 08

Steve Wrote: "Southampton is a productive and profitable plant"

Wrong. It's making a $12million loss per year. See the meeting minutes.

Mad Max, the prairies says...
10:52pm Wed 16 Jul 08

So if the Transit is going to be built in Turkey.... Will you be able to buy knock off copies from the many markets??? Dodgy spelling on the front badge (Furd), who will notice...

southy, redbridge says...
11:06pm Wed 16 Jul 08

Sheitma Pance said " Typical New labour tactic, this!

Do you labour-ites SERIOUSLY think the public are stupid enough to believe this? If so, you seriously underestimate the intelligence of the British public, and you do so at your peril!

The tactic: Blame the Government of the 1980's for the problems encountered some 20 years later.

Sorry, it won't wash. The problems of today were caused by New labour; they have no one to blame but themselves."
your normal for a had tory voter can see what pass goverments did and that we are still paying for and we shall be paying for it for another 20 plus years,new labour is more tory than the torys,i for one would be glad to see the unions back in power in the labour party,and start reversing the changes that the 1979 to 1989 goverment did.if you was around in them days just remember what happen because its going to happen again if the torys get full power again.

southy, redbridge says...
11:16pm Wed 16 Jul 08

sorry spelling error this part should of said:-

your normal for a hard tory voter can't see what pass goverments did and that we are still

hmm, says...
4:58am Thu 17 Jul 08

southy wrote:
sorry spelling error this part should of said:- your normal for a hard tory voter can't see what pass goverments did and that we are still
Or how about:-

"You're normal for a hard Tory voter. Can't see what past Governments did and that we are still"

Having corrected your correction you still talk rubbish. A great advertisement for this Country - no wunder bizniss prefurs overcees lokatshones.

british, european and world citizen, says...
7:44am Thu 17 Jul 08

Bob444 wrote:
This is typical of the U.S. We bend over backwards to help them out and put business their way (e.g., the British schools\' SATs were organised and marked by a U.S. company - they then made a mess of it) and they put our workers on the dole (soon will, anyway).

The next U.K. census will be done by a U.S. company - can they be trusted with our information, or is it just another Big Brother exercise?

We are supposed to be in Europe now, so maybe it\'s time to cut free from the Yanks.

We don\'t want to be drawn into any more of their wars either.
Do you always need to scapegoat, blame someone? Xenophobia is ugly. Its economics. Simply economics. The End.

Thomas Downes, Southampton says...
8:04am Thu 17 Jul 08

I told you so. Short sighted management as usual

Militant Ford Worker, Coming to a picket line near you says...
9:43am Thu 17 Jul 08

So this HR bod thinks people will be 'desperate' to come and work for ford for half pay?
If we are looking for savings in the plant we can start with outsourcing the HR dept.
I'm sure there are plenty of other graduates like him, just out of Uni and still wet behind the ears, who can make the same asinine comments for 50% of his salary.
Let's see how long he keeps his job after we have been out for 6 weeks.

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