Ineos Automotive, the vehicle division belonging to British billionaire Sir Jim Ratcliffe, has today confirmed that it has bought a car factory in France from Mercedes-Benz and will start to build its Grenadier 4×4 there in late 2021.
The acquisition of the Hambach plant will ‘safeguards 1,300 jobs that might otherwise have been lost’ in the region, the recently formed vehicle brand said in a statement on Tuesday.
However, the deal is a nail in the coffin for prospective jobs in South Wales, which had been the destination originally planned for the manufacturing of the utilitarian 4X4, which is being dubbed the spiritual successor to the Land Rover Defender.
The project was initially set to provide 500 new jobs in Bridgend at a state-of-the-art facility close to the recently closed Ford engine plant.
Grenadier’s new home: Ineos Automotive – owned by British oil mogul Sir Jim Ratcliffe – has confirmed it will make its new 4X4 at this former Mercedes plant in France, ditching plans for a state-of-the-art factory in South Wales
Ineos said the Hambach facility is ‘ideal’ for production of its agricultural offroader.
Bosses described it as ‘one of Europe’s most modern automotive manufacturing sites’ that is home to ‘a highly experienced and capable workforce’.
The British firm said the facility has an ‘excellent track record amongst Mercedes plants for the quality of its output, and recently benefited from a major investment to enable the production of larger vehicles’.
While the instant availability of the production site – rather than having to build one from the ground up in Wales – was one of the biggest determining factor behind the decision, its location on the French-German border will also guarantee trade-free access to supply chains within the EU post Brexit.
The firm added that by taking over the French plant it can ‘remain on track to meet its plans to deliver the Grenadier to customers in early 2022’.
But it won’t be just the Grenadier that will is produced at the facility.
German carmaker Daimler had put up for sale its Hambach factory in France (pictured), near Metz and Saarbrücken, as it tries to cut costs
Part of the agreement with Daimler will see Ineos continue making Smart EQ ForTwo models – the compact electric-powered city cars – at the facility
Ineos said earlier this year that it has suspended the post-lockdown resumption of work at sites in Wales and Portugal pending a decision to take over the Hambach plant (pictured)
Under the terms of the acquisition, Mercedes-Benz will contract Ineos to continue to make the electric Smart EQ ForTwo and some Mercedes-Benz components at the Hambach site.
Dirk Heilmann, chief executive officer of Ineos Automotive, said: ‘This acquisition marks our biggest milestone yet in the development of the Grenadier.
‘Alongside the exhaustive testing programme that our prototype vehicles are now undergoing, we can now begin preparations at Hambach to build our 4X4 from late next year for delivery to our customers around the globe.’
The Grenadier 4X4 made its UK debut at the Concourse of Elegance at Hampton Court Palace in the summer. Ratcliffe admitted it was also the first time he’s seen the vehicle in the metal
The 4X4 is a direct rival to the Land Rover Defender, but today Ratcliffe compared it to the Mercedes-Benz G-Wagon
Sir Jim Ratcliffe (right) all but confirmed to This is Money in September that the new Ineos Grenadier 4X4 will be produced in France and not Wales, as originally intended
A bitter blow for Bridgend
The decision is a hammer-blow for South Wales and for the British automotive sector.
In an exclusive interview with This is Money in September, Ratcliffe – Britain’s fifth richest man – hinted that an agreement to make the Land Rover Defender rival at the Daimler-owned factory in Hambach was ‘pretty much’ decided.
Just 12 months earlier, Ratcliffe had said that the 4X4 would come with a ‘Made in Britain stamp’ as it would be produced at a new ‘state-of-the-art’ factory in Bridgend.
Proposed UK automotive jobs could be scrapped: Ineos Automotive had previously said it will build its new Grenadier 4X4 at a new ‘state-of-the-art’ facility in Bridgend, Wales
The South Wales plant would have created 200 new jobs initially, expanding to 500 once production ramps up. Ford’s due-to-close engine plant is the building you can see in the top left of this image
The Grenadier offroader was only unveiled in full in July, revealing a shape very similar to that of the previous-generation Land Rover Defender
Not only that, Ineos Automotive unveiled computer-generated images of how the plant could look at the site close to the Ford engine factory, which is due to close this month.
The site South Wales was identified as an ideal location with some 1,644 skilled automotive workers looking for new roles following the closure of the nearby Ford engine factory at the end of September.
However, the availability of a ready-made production facility in Hambach – close to the German border and near the German city of Saarbrucken in industrial Saar region – saw plans to build in the UK put on hold.
In a statement released in July, Heilmann had said: ‘Overcapacity has long been a major issue for the automotive sector.
‘Of course we considered this route previously, but as a result of the Covid-19 pandemic some new options such as this one with the plant in Hambach have opened up that were simply not available to us previously.
‘We are therefore having another look – and reviewing whether the addition of two new manufacturing facilities is the right thing to do in the current environment.’
Petrochemicals firm Ineos, which is owned by the pro-Brexit billionaire Sir Jim Ratcliffe (pictured) – named the fifth richest man in Britain by the Sunday Times this year – said last autumn that it would make the vehicle in Wales
How does the Ineos Grenadier compare to the new Land Rover Defender? Here’s a head-to-head
He added: ‘Covid has had an impact on our build schedules with ground clearing works and construction held up by the social distancing measures that have been required.
‘Safety is of course paramount, but we also have an obligation to do what is right for the business – and so need to assess these new opportunities in order to maintain or improve on our timelines.’
Bosses had estimated that Ineos Automotive would build up to 25,000 4X4s a year, which would have created 200 jobs in Wales initially, rising to 500 in the longer term.
Around 100 staff are already with its engineering partner MBTech at its centre near Stuttgart in Germany – just 140 miles from Daimler’s Hambach factory in eastern France.
The engines used in Grenadier will be six-cylinder petrol and diesel BMW powerplants, which would also be easier and cost-effective to transport to a production facility on the French border rather than incurring import tariffs to ship to Wales post-Brexit.
Grenadier is designed to be s a hard-working, utilitarian 4X4 in the same ilk as the original Land Rover Series and aimed at farmers and off-road enthusiasts
From launch, the Grenadier will be powered by 3.0-litre BMW petrol and diesel engines, though there’s an electric hydrogen-powered version to follow
A sub assembly plant in Estarreja, Portugal, had also originally been planned to produce chassis and body components.
It was said to also create up to 500 more jobs in the longer term, but is now at risk.
Speaking to This is Money, Ineos Automotive commercial director, Mark Tennant, said earlier this year: ‘Grenadier is absolutely going ahead. This is a re-affirmation of it going ahead. We are looking at something that was not previously available. It’s not something we are taking lightly.’
The fall-out from the coronavirus has been a factor for the consideration to switch to the factory in mainland Europe, but Brexit had not, he insisted – despite some industry skeptics seeing it as convenient cover for a hard-nosed financial move.
Mr Tennant claimed the opportunity of a ready-made site provided by Hambach was the driving factor, not Britain’s decision to leave the EU.
Brexit was not an issue. Brexit has not played a role. We are looking to mitigate risk around timescale. There’s a lot up in the air about a second wave of Covid.
Mark Tennant – Ineos Automotive
‘Brexit was not an issue,’ he said. ‘Brexit has not played a role.
‘We are looking to mitigate risk around timescale. There’s a lot up in the air about a second wave of Covid.’
Ineos owner, Ratcliffe, 68, has been a vocal supporter of Brexit, saying Britain would thrive outside of the EU.
In an interview with The Sunday Time in 2018 – shortly after he was knighted – he said: ‘The Brits are perfectly capable of managing the Brits and don’t need Brussels telling them how to manage things.
‘I just don’t believe in the concept of a United States of Europe. It’s not viable.’
However, today’s announcement could result in a public backlash against the petrochemicals mogul, similar to the one aimed at Britain’s richest man, Sir James Dyson, when he announced his intention to move production of his ill-fated electric car from the UK to Singapore, despite intensely backing the Brexit decision.
The electric SUV project was eventually shelved late last year after the entrepreneur said it was ‘not commercially viable’.
Sir James Dyson, Britain’s richest man, was heavily criticised when he announced plans to shift production of the brand’s electric car from the UK to Singapore in 2018, despite strongly backing the Brexit campaign. The zero-emission SUV project was eventually axed last year
The Hambach plant has been recently developed with a new dedicated SUV line, similar in size to the Grenadier
Ineos bosses said the adaptations already made to the production facility would be ‘ideally suited’ to build the new Grenadier 4X4
Ineos Automotive will launch two variants of their own off-roader – a classic 4X4 design (left) plus a double-cab pick-up (right) with an open load-lugging platform at the back
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