DRAFT Analysis: Ford's UK factory hit by emissions regulations

London – Ford’s decision to close its engine plant in Bridgend, Wales, could be seen as the latest victim of tougher CO2 emissions regulations that will start to take effect across Europe in 2020.

Ford said on 6 June that it would close the factory, which employs 1,700, toward the end of next year after cutting projected demand for the 1.5-liter three-cylinder gasoline engine made there.

“We initially installed a 125,000 capacity in Bridgend for the engine, but our projected demand is now lower than that,” Ford of Europe President Stuart Rowley said on a media call.

According to Rowley demand is higher for the smaller, more frugal 1.0-liter gasoline engines Ford makes elsewhere in Europe.

The 1.5-liter engine was key to the plant’s survival after Jaguar Land Rover stopped taking Ford’s V-6 gasoline engine and announced it would also cancel orders for a larger V-8 unit when the contract ends next year.

JLR now builds six-cylinder engines in-house and is expected to source V-8s from BMW instead.

The reduced demand for the 1.5-liter engine was a death blow for a plant that would be running well short of its three-quarters of a million annual capacity.

The gasoline direct-injection turbocharged engine, named Dragon, was launched in Bridgend in 2018 and was used in both the Ford Kuga compact SUV and the new Focus compact family.

It was theoretically a good alternative for customers increasingly shifting away from diesels.

But the need to cut its CO2 average ahead of new targets and the changing demands of customers for a more frugal engine that didn’t trigger higher taxation meant Dragon was no longer central to Ford’s plan.

For the new Kuga due later this year, Ford unveiled three hybrid models, none of which use Bridgend's 1.5-liter unit as its base engine.

“The regulatory environment means electrifying those products to allow them to be competitive on CO2,” Rowley said.

In the Focus, Rowley sees demand growing for the more economical 1.0-liter EcoBoost engine “given its CO2 competitiveness compared to the larger displacement engines.”

Meanwhile Ford has decided not to install the new 1.5-liter engine in the forthcoming Puma small SUV at all, preferring instead to offer the 1.0-liter gasoline unit in two power outputs, one of which will be offered as a mild hybrid.

The 1.5-liter engine will still be available in both the Kuga and Focus, as well as performance versions of the Fiesta.

Following the plant closure Ford will ship the engine from Mexico, where it has excess capacity.