Closure at Ford Bridgend – what next for the workforce?

Blog posts

7 Jun 2019

Stephen Bevan, Director, Employer Research and Consultancy 

The UK labour market is full of paradoxes, it seems. We have record employment rates yet historically low real wage growth. We have the lowest unemployment rates since the mid-1970s but the headlines seem to be punctuated by news stories detailing significant job losses in retailing – where 150,000 jobs were lost in 2018 alone - and in manufacturing. Indeed, there was more bad news for the UK car manufacturing sector yesterday when Ford announced the closure of its Bridgend engine plant by 2020 with the loss of 1700 jobs. This was just the latest in a series of disappointing announcements by UK-based car firms. Last month it was announced that the Honda plant in Swindon will close by 2021 with the loss of 3500 jobs and in January this year Jaguar Land Rover (JLR) announced 4500 job cuts from its 40,000 UK workforce.

I’ll leave it to others to speculate about the underlying reasons for these structural shifts in the motor manufacturing sector and focus here on the consequences for the workforce and the local community, because the news yesterday reminded me of two studies I led looking at the closure of the MG Rover plant in Longbridge, Birmingham in 2005. In total 6,300 people lost their jobs and, working in conjunction with BBC Radio 4, we followed a sample of the workers and their families in two follow-up surveys in 2006 and 2008. I then worked with Adrian Chiles to put together three radio programmes telling their stories, looking at the employment experiences, wage levels and wellbeing of those who lost their jobs.

The good news was that a total of 90 per cent of the ex-Rover workers were in some form of employment by April 2008. Almost three quarters were employed full-time, 11 per cent were self-employed and 5 per cent were working in part-time roles. Another 5 per cent were unemployed and looking for work and 2 per cent were unemployed and not looking for work.

Of course, on top of gaining new work the quality of those jobs was also a concern for the former Rover workers. Some 28 per cent of those who were in new jobs said their current job was better than the one they had at MG Rover, 21 per cent that it was about the same and 46 per cent that it was worse (the remainder were unsure). Nevertheless a majority still said they liked the work they did and expected to be doing it for the foreseeable future.

Real terms wage cuts

The story on pay was less positive as we found that two thirds suffered wage cuts - of an average of £5,640 per year in real terms. A third of the former Rover workers reported an increase in their salaries with those out of work the longest suffering the largest drops in income.

Just over 30 per cent of workers stayed within the manufacturing sector and were earning broadly similar amounts, but the 60 per cent who had moved into the service sector were mostly earning less. Respondents who found work in four sectors - wholesale and retail, real estate and business services, education, and health and social work - took average cuts of more than £6,000 in annual income. Almost a quarter of respondents said they were in debt or in need of drawing on savings; 36 per cent said they are just about able to manage on their current incomes; and a further 38 per cent said they were in a position to save some money.

In total 60 per cent of workers accessed opportunities for re-training and education. Two thirds took up the offer of free training places offered by local agencies and many others underwent training by their new employers. The types of assistance and support that people found most helpful were free travel to a training course or job interview; a free place on a training course; being sent on a training course by a new employer; and help with setting up a business. However, most people who found a new job did so through their own initiative or through personal contacts.

Health & wellbeing

In general, despite the initial shock, people’s health and wellbeing was positive three years on and people claimed reasonable job satisfaction and reasonable life satisfaction, although the research was conducted prior to the 2008 financial crisis. Judged against national levels, however, it appeared that the ex-Rover workers were in jobs with slightly lower levels of autonomy, challenge and skill use, and fewer opportunities for progression than other workers in the UK. It isn’t true to say that wellbeing was unaffected, however.

As with many car plants, a large proportion of the local Longbridge community were employed either directly or indirectly by MG Rover and we found that this had both positive and negative effects. We found that many marriages were put under strain as a result of the financial pressures caused by the job losses. Interestingly we found that being married helped protect the psychological wellbeing and resilience of the men who lost their jobs but that this effect was absent for women. We also found that, three years on, the group with the most positive self-reported wellbeing were those who had become self-employed or who had set up their own businesses.

Clearly there are lessons here for those agencies which will be supporting workers leaving the Bridgend and Swindon plants in the coming months. Research for the Men’s Health Forum shows that men are nearly twice as likely to have mental health problems due to being unemployed than women and that unemployed men actively seeking work have a 20 per cent greater risk of death than employed men. Our work also showed that, despite occasional reluctance among some older men to engage in retraining initiatives, having a positive attitude to acquiring new skills and being open to working in other sectors and roles can be pivotal in helping displaced workers gain alternative work quickly and sustainably.

Although much of the news coverage about Bridgend will focus understandably on the state of the car sector and the role, if any, of Brexit it is important to remember the human stories which will emerge in the coming months. The medium-term damage of a devastating plant closure can be mitigated, but only with planning, foresight and compassion. Let’s hope that there is time to work with the employees, unions and local agencies to make sure that the lessons from previous closures can be learned and built upon.