Ford seeks a new path in the defence sector as it joins forces with defence giants General Dynamics and Ricardo to bid for a UK Ministry of Defence (MoD) contract, aiming to supply 9,000 vehicles over the next five to seven years. This venture, spearheaded by Ford UK’s chair Lisa Brankin, represents an effort to compensate for the downturn in engine production at its Dagenham plant, which currently operates at half its capacity from a decade ago.
From Roads to Battlefields
The European automotive industry, once a powerhouse, is now trying to revive itself amidst declining output by eyeing increased defence spending. The strategy involves repurposing underused manufacturing plants to produce military vehicles, an area where Brankin sees potential for quick response to defence needs. Ford’s rich history in military production, dating back to World War Two, could offer a sturdy foundation for this pivot back to defence.
Historically, Ford’s Dagenham plant was instrumental during the war, producing 360,000 military vehicles and supporting the aviation sector with 34,000 Merlin engines for fighter planes. This legacy could be rekindled as European defence budgets surge in response to the escalating geopolitical tensions with Russia.
Global Shifts and Economic Pressures
Ford’s ambitions are part of a broader trend where automotive companies are leveraging defence collaborations to boost their struggling industry. Renault and Volkswagen have already made their moves into defence. Renault plans to produce military drones in cooperation with Thales, while Volkswagen is transforming a previously underutilised factory into a military manufacturing hub through a partnership involving an Israeli defence investment.
Jaguar Land Rover (JLR), another bidder for the MoD contract, is similarly expanding its military business ambitions to sustain itself against international competition. With recent job cuts impacting 4,000 roles within JLR, its dependency on large-scale production and substantial supply chain activities makes its stability pivotal to the UK automotive landscape, according to Dave Roberts from Evtec.
The Defence Shift: An Insufficient Answer?
The Society for Motor Manufacturers and Traders (SMMT) endorses the transition to defence manufacturing, recognising the vulnerability of the UK supply chain reliant on a few primary manufacturers such as Nissan, Toyota, and BMW. However, converting automotive manufacturing capacity to defence production might not be entirely feasible. The differing nature of defence and automotive industries could present political, economic and logistical challenges, despite the potential benefits.
Chinese Influence in European Manufacturing
On another front, European and UK automakers are increasingly collaborating with Chinese firms to mitigate operational costs from inactive production lines. Partnerships like Stellantis with Leapmotor and Nissan with Chery reflect this trend, where using spare European factory capacity could offer mutual benefits in tariff circumvention and increased production activity.
Despite these shifts, the integration of Chinese manufacturing capabilities into Europe might not directly revitalise local supply chains. The extent to which these collaborations introduce job opportunities or support local industries remains uncertain, as they often involve performing only the final assembly on European soil.
Ultimately, while defence collaborations and Chinese partnerships provide some relief, they do little to restore the former might of Western auto industries. UK Defence Spending’s aim to revitalise domestic industry with significant investments will be essential if a broader recovery is to be achieved.
Reporting based on coverage first published by bbc.co.uk.