Around 200 jobs are expected to be created by 2021, before rising to 500 “in the long term”, the Welsh government said.
That will go some way to alleviating the pain of 1,700 hundred job cuts that Ford announced at its nearby plant in Bridgend in June.
Ineos, the petrochemicals conglomerate founded by Sir Jim Ratcliffe – a vocal Brexit supporter and once Britain’s richest man – has been handed £150,000 of government funding for the project as part of a competition to develop zero-emissions vehicles.
Sir Jim, whose personal fortune is estimated at £12.2bn, has previously lobbied the government to reduce green taxes and slash restrictions on fracking – the controversial method of extracting fossil fuels in which Ineos has heavily invested.
The UK and Welsh governments have provided further financial support for Ineos’ new car project but, when contacted by The Independent, neither would reveal how much or any further details.
Any public funds pledged to support Mr Ratcliffe’s business interests are likely to raise eyebrows. In February, The Sunday Times reported that Sir Jim and his two key lieutenants, Andrew Currie and John Reece, were planning a move to the tax-free principality of Monaco in a bid to save £4bn in UK taxes. Between them, the three men own all of Ineos’s shares.
The move to build around 25,000 of the new “Projekt Grenadier” vehicles in Wales will come as a rare piece of positive news for Britain’s beleaguered car industry which has been battered by the threat of Brexit and thousands of job cuts.
However, the scale of the new production is small compared with the hundreds of thousands of cars manufactured at the UK’s largest car plants.
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Secretary of State for Wales Alun Cairns said: “Ineos’s investment will provide a welcome boost to our automotive sector and to this part of Wales, creating important jobs which will contribute to a strengthened economy. It is also a clear demonstration of confidence in the UK economy.”
Sir Jim has previously expressed his fondness for the classic Land Rover Defender, which went out of production four years ago, and in 2017 announced plans to build a new car with a similar rugged aesthetic.
Jeff Beck, Wales and South West regional organiser for the GMB union, welcomed the news.
“As a union, we've long argued that the government needs to intervene to protect and promote manufacturing in the UK, and the results are clear for everyone to see.
”Car making is in the DNA of Bridgend, and with the highly skilled workforce in Bridgend we're certain that Ineos will be more than pleased with the quality manufacturing once they get going.”
Business Secretary Andrea Leadsom said the government is investing in the next generation of electric cars and that Ineos’ announcement is “further evidence that the UK is the best place to develop the latest automotive technologies”.
However, the industry has repeatedly sounded the alarm about the negative impact of Brexit uncertainty on one of Britain’s most successful sectors.
In July, the Society of Motor Manufacturers and Traders said investment in the UK car industry has suffered a “precipitous” decline, plunging to £90m in the first six months of the year from £347m in the same period last year.
In 2014, automotive firms invested in excess of £4bn in the UK, while for 2015 the figure was in excess of £2.5bn. Production has dropped sharply from a peak in 2016 as car makers grapple with Brexit and falling diesel sales, among other problems.