Ford has confirmed it is to invest £238m on its Bridgend engine plant – but the boost to the Welsh economy is dependent to the European Union approving regional grant assistance from the National Assembly of Wales totalling £16m.

The situation reminiscent of Nissan's investment at Sunderland which was also dependent on the go-ahead of a UK government financial aid package from the EU.

But Ford would not discuss the details of the grant aid application. “It's a sensitive issue. We're not going to even think about what will happen if we don't get the grant,” a spokeswoman said.

If approval is given Ford proposes to produce V6 and V8 engines for use in Premier Automotive Group vehicles.

Production will start towards the end of 2002, with annual production reaching 325,000 at full capacity, taking annual production to more than one million per year. Bridgend already produces V8 engines for the Jaguar, XJ, XK, and S-Type, together with Zetec SE and Zetec engines for the Ford Fiesta and Focus.

The new V engines will be installed in the Jaguar S-Type, XJ, and XK series and future Jaguar and other PAG products. V-engines for the S-Type are currently produced in Cleveland, Ohio. Production will transfer from Cleveland to Bridgend.

Longer term, an industrial park is also planned adjacent to the site to provide technical and manufacturing centre.

David Thursfield, president and CEO, Ford of Europe, said: “Optimising the use of our manufacturing capacity by building engines for the other Ford brands is another major step in the implementation of our European turnaround strategy.

“The Bridgend plant has shown the commitment to quality and to efficiency improvements that will make this a very successful programme.”

Wolfgang Reitzle, PAG president, said: “This investment is a good example of how the different brands within Ford can make the best use of their combined resources in the interests of the customer, without compromising brand integrity.”

The investment will see 600 jobs created at the plant.

Adding today's investment announcement at Bridgend to the $500m investment announced on May 12, 2000 for the expansion of diesel engineering and manufacturing at Dagenham, Ford plans to spend almost $1 billion on new engine manufacturing facilities in the UK and will be capable of producing close to two million engines a year.