After weeks of rumour, Ford yesterday called an end to its long history of mass car production in the UK.
The global car company admitted that it was sacrificing its assembly plant at Dagenham in order to secure jobs at its other European operations.
Nick Scheele, the Ford of Europe chairman, said that 1,900 jobs would be lost after the group's decision to halt car production at the Essex plant in the first quarter of 2002.
He admitted that Ford had gone back on its 1997 promise to build a new model at the plant but said market conditions had changed.
If Ford had invested more in production at Dagenham, far more jobs would eventually have been lost at its other European operations, he said.
The long expected decision came with a package of sweeteners, including generous redundancy terms and an £8m fund to help workers find new jobs. Ford says it is planning to invest £2bn in new facilities in Britain over the next five years, but refused to say how or where the bulk of the money would be spent.
Dagenham workers were angry that Ford had gone back on its promise to build the new Fiesta in Essex. Instead it will be built in Cologne, Germany.
Union officials will take soundings from the workforce next week before deciding whether to press for industrial action. The Manufacturing Science and Finance Union said other marques owned by Ford, such as Volvo and Mazda, could easily be built at Dagenham.
Mr Scheele said Ford's engine plant at Bridgend in south Wales could win a contract to make a new engine, creating new investment and jobs.
The Dagenham assembly plant is staying open for a few months longer than originally rumoured and will not now close until early in 2002.
The huge Essex site is to become Ford's centre for diesel engine manufacturing and design. The group plans to spend $500m expanding the existing diesel engine plant, creating 500 jobs within five years.
Mr Scheele dismissed claims that the company had chosen to end car making at Dagenham because it was easier to get rid of workers in Britain than in mainland Europe.
He blamed the closure on overcapacity. The decision to retain car assembly at Cologne and not Dagenham was because the German plant had greater flexibility to produce different models, he added.
Ford is committed to spending $50m on regenerating Dagenham as part of the government's Thames Gateway project. The Department of Trade and Industry yesterday confirmed that the government's own Dagenham regeneration package included no new money. Announced this week by Stephen Byers, the trade and industry secretary, it co-ordinates existing schemes.
