Ford secures $ 640million government loan guarantee to protect UK engine exports
LONDON – The UK government has given Ford Motor a £ 500million ($ 640million) loan guarantee to support the automaker’s substantial exports of engines and transmissions from Britain.
The guarantee will help Ford increase its investment in electrification and protect jobs at its sites in Essex and Dagenham, Britain’s Department for International Trade said in a statement on Tuesday.
The guarantee covers 80 percent of a £ 625 million loan from commercial banks.
“This funding will help maintain Ford as a key British exporter,” Graham Hoare, Ford’s president in Britain, said in a declaration.
About 85 percent of the engines and 100 percent of the transmissions that the company builds in the UK are shipped overseas. The value of Ford’s UK exports, including engineered engine components, is around £ 2.5 billion a year, Hoare said.
Ford and its UK auto counterparts face an uncertain future, with the prospect of tariffs on EU sales in the event of a no-deal Brexit next year.
They also face additional red tape in the form of customs declarations, separate regulatory regimes and proof of the origin of their goods.
The threat of border chaos with the UK’s largest export destination is another concern, given traders’ lack of preparedness for new administrative requirements and business preparations for Brexit being hampered by the coronavirus.
Ford announced last year its intention to close its engine plant in Bridgend, Wales.
The automaker is a member of the UK auto trade group which last month called on the government to support the industry’s recovery from the pandemic.
Despite these challenges, UK International Trade Secretary Liz Truss has said the UK government is focusing on the needs of automakers.
“A thriving auto industry is vital to the success of the UK economy,” Truss said in the statement. “We put its needs at the heart of our strategy to remove barriers to trade when negotiating free trade agreements.”