Jaguar Land Rover (JLR) will stop sourcing petrol engines from Ford’s plant in Bridgend, Wales, after calling off its current contract earlier than expected in 2020.
The future of Ford’s engine plant at Bridgend has been thrown into further uncertainty after Jaguar Land Rover called off a contract that accounts for a fifth of the site’s output.
The Ford site currently makes small petrol engines for Ford’s cars as well as larger, more powerful V6 and V8 engines for JLR, under a deal signed when Ford sold JLR to Tata Motors in 2008.
“We have informed our unions that Jaguar Land Rover intends to end our petrol engine supply arrangement slightly earlier than expected in late 2020,” Ford said in a statement.
“Given our long-established and successful relationship in the delivery of world-class engines, this is disappointing news for the Ford Bridgend Engine Plant.”
But the Range Rover maker has told Ford that it will bring its production in-house just before the existing contract comes up for renewal in December 2020. Last year the plant made 14,000 JLR engines and 514,000 Ford engines.
Around 750 workers, about half of the plant’s total, are dedicated to JLR production, the source said.
Ford said it would “continue to look at other high technology opportunities for Bridgend in the future.”
The unit of Tata Motors Ltd. plans to replace Ford supplies with engines from its own plant in Wolverhampton, England, as part of a 450 million-pound ($605 million) investment.
JLR, owned by India’s Tata Motors opened a new engine plant in England’s West Midlands in 2014, and in 2015 announced a plan to double its size, taking total investment to about 1 billion pounds ($1.3 billion).
The company said that in line with its contract it had served the required three years notice to Ford for the supply of the 6 and 8 cylinder petrol engines from its Bridgend plant.
“Ford has been, and remains, an important strategic supplier to Jaguar Land Rover under an agreement which was negotiated to support our business until the end of the decade,” it said.
Want to become an investor/trader in the stock market? Fill yourself in on marketing news by subscribing to HQBroker. We encourage traders to know more about the latest information about forex, stock markets, commodities, and economies.