Ineos has suspended plans to build a new 4×4 vehicle in south Wales and may make the vehicle at a site in France instead.
The factory in Bridgend had been expected to create up to 500 jobs, providing a boost to automotive workers just as Ford closes its engine plant in the town with the loss of 1,700 roles.
But now Ineos Automotive – part of the business empire controlled by chemicals billionaire Sir Jim Ratcliffe – has revealed that it is in talks to buy the alternative Hambach site in Moselle which is being sold by Mercedes-Benz.
The earlier decision to build the company’s new Grenadier model in Bridgend was hailed by Boris Johnson as “a vote of confidence in UK expertise” at the time it was announced last autumn.
It would have seen the vehicle assembled at the south Wales factory, using a chassis made at a separate site in Portugal, and production had been expected to start in 2021.
But Ineos is now looking at use the Hambach site – after it was last week put up for sale by Mercedes-Benz as part of a cost-cutting overhaul.
Ineos described the French factory, which has recently been developed with a dedicated SUV production line, similar in size to the Grenadier, as “ideally suited” to its needs.
It said it was “assessing the option to utilise existing capacity within the industry, as an alternative to building its own plants”.
Dirk Heilmann, chief executive of Ineos Automotive, said: “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.”
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The company said: “We have therefore suspended the post-lockdown resumption of work at our sites in Wales and Portugal pending the outcome of this review.”
The review is expected to be completed in the next few weeks.
Welsh health minister Vaughan Gething said the announcement was “obviously extremely disappointing”.
“If they do go ahead and decide not to make that investment then that would be a really significant step backwards for Bridgend and a very difficult day for people looking to their future,” he added.