Ineos set to SCRAP plans to build its new Grenadier 4X4 in Britain

Ineos Automotive could be set to ditch plans to build its first off-roader – revealed last week – in Britain, it has emerged today.  

A state-of-the-art factory was due to be built in Bridgend, South Wales, for production of the new utilitarian Grenadier offroader, creating up to 500 jobs in the region.

However, bosses are now considering whether to manufacture the vehicle in France after carmaker Daimler announced plans to sell its factory there as pressures mount amid the coronavirus pandemic.

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 Bidgend, Wales, but today has admitted it could switch production to France

Petrochemicals firm Ineos, which is owned by the pro-Brexit billionaire Sir Jim Ratcliffe – named the fifth richest man in Britain by the Sunday Times this year – said last autumn 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 South Wales.

Not only that, it revealed computer-generated images of how the plant could look at the site close to the Ford engine factory, which is due to close in September this year. 

However, the availability of a ready-made production facility in Hambach in northwest France – close to the German border and near the German city of Saarbrucken in industrial Saar region – has resulted in plans to build in the UK being put on hold.

In a statement released on Tuesday, Ineos Automotive chief executive, Dirk Heilmann, 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.’

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 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 last week, revealing a shape very similar to that of the previous-generation Land Rover Defender

The Grenadier offroader was only unveiled in full last week, revealing a shape very similar to that of the previous-generation Land Rover Defender

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

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 

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

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

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.’

Ineos Automotive chief executive, Dirk Heilmann

Ineos Automotive chief executive, Dirk Heilmann

Ineos will review its options in the next few weeks, it said.

The company states: ‘Specifically, Ineos Automotive has entered detailed discussions with Mercedes-Benz on the acquisition of its Hambach site in Moselle, France. 

‘We have therefore suspended the post-lockdown resumption of work at our sites in Wales and Portugal pending the outcome of this review. 

‘Further updates will follow in the coming weeks.’ 

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.

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.  

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 n the longer term, but is now also at risk.

German carmaker Daimler said on Friday it wanted to sell its factory in Hambach (pictured) in near Metz, as it tries to cut costs

German carmaker Daimler said on Friday it wanted to sell its factory in Hambach (pictured) in near Metz, as it tries to cut costs

The site is currently the home of the Smart EQ ForTwo models - the compact electric-powered city cars

The site is currently the home of the Smart EQ ForTwo models – the compact electric-powered city cars

Speaking to This is Money, Ineos Automotive commercial director, Mark Tennant, said: ‘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 France, 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, 67, 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’.

The Hambach plant has been recently developed with a new dedicated SUV line, similar in size to the Grenadier

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 bosses said the adaptations already made to the production facility would be ‘ideally suited’ to build the new Grenadier 4X4

Although Ineos says the decision to look at Hambach had ‘only just’ been taken, Mr Tennant did confirm that the company had spoken to the Welsh government ‘a few days earlier’ to alert them to the fact that production in Britain may not go ahead. 

Months of inactivity at the Bridgend site had also been the cause of some speculation. The firm said that this has been caused by the lockown, which has delayed ground clearance work there by three months.

However, the choreography of unveiling the good news of the vehicle last week then the blow to South Wales today suggests to some in the industry a longer and more directed strategy. 

Mark Tennant, Ineos Automotive commercial director

Mark Tennant, Ineos Automotive commercial director

Mr Tennant said; ‘The Grenadier has got to be a strong commercial proposition. We have to look at existing capacity. We’re still in negotiations.’

If the Hambach option is concluded, production in South Wales and Portugal will not go ahead, he confirmed. ‘It’s a binary decision,’ he explained,

It was ‘too early’ to talk about any compensation or otherwise to the Welsh authorities who were developing the wider site for businesses, he added. 

Mr Tenant said he was confident that, despite the delays caused by coronavirus, production at the end of 2021 and first sales in 2022 would remain on schedule.

‘Our aspiration is still to start production at the end of 2021 and have the Grenadier on sale early 2022,’ he told us.

The coronavirus pandemic has seen demand for new vehicles around the world slump and worsened problems affecting overcapacity, just as the sector pumps billions into electrifying its model line-ups to meet stringent emissions rules.

German carmaker Daimler said on Friday it wanted to sell its factory near Metz, as it tries to cut costs. 

The site, which is the home of the smart EQ fortwo models, has been recently developed with a new dedicated SUV line, similar in size to the Grenadier.

Ineos bosses said this would be ‘ideally suited’ to the production of the 4X4, which is seen as the spiritual successor to the Land Rover Defender. 

Ineos said it has suspended the post-lockdown resumption of work at sites in Wales and Portugal pending a decision to take over the Hambach plant being sold by Daimler (pictured)

Ineos said it has suspended the post-lockdown resumption of work at sites in Wales and Portugal pending a decision to take over the Hambach plant being sold by Daimler (pictured)

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

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 

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.

 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.

David Leggett, automotive analyst at GlobalData, a leading data and analytics company, said the decision could be a ‘potentially big blow to the Welsh economy’ and especially to the Bridgend area that is ‘also losing a Ford engine factory that is set to close at the end of this year’. 

‘If Hambach has the capacity, it offers a simplified one-site manufacturing solution at a ready-made facility with good proximity to automotive suppliers and good transport links,’ he added.

‘Moreover, its position inside the EU means it would avoid any new import tariffs that could apply to UK-EU shipped parts and vehicles when the UK’s Brexit transition period ends next year – a potential problem that came with the Wales plant.

‘The timescale to conclude a transaction on the Hambach plant is inevitably tight if the schedule to launch the Grenadier in 2022 is to be met.’

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