LONDON/ COLOGNE -- Ford has picked the UK over Germany for its first electric vehicle components factory in Europe.
The automaker said it is investing 230 million pounds ($316 million) to convert its transmission plant in Halewood, northwest England, to produce electric drive units for future Ford full-electric passenger and commercial vehicles sold in Europe.
Production will begin in 2024, Ford said in a statement on Monday. Capacity is planned to be around 250,000 units a year. The investment will safeguard about 500 jobs at the factory.
An electric drive unit combines the electric motor, invertor and transmission and replaces the engine and gearbox in a combustion engine car.
Ford did not comment on whether it would build each element at the plant or source from suppliers and assemble them into a single unit on site.
Labor bosses at Ford's German operations criticized Ford's choice of the UK factory for the investment instead of converting its other European transmission plant in Cologne, Germany.
Cologne is where the automaker's first European-built, mass-market full-electric car will go into production starting in 2023.
"From an industrial logic point of view, the component plant should have been located in Cologne," Martin Henning, the head of Ford Germany's works council, told Automotive News Europe sister publication Automobilwoche.
German union leaders said the UK government had "put a lot of money on the table" to secure parts production at Halewood. The size of the subsidies would have been against European Union rules for state aid, the union said.
The British government has been generous to automakers willing to keep business in the country as it battles to overcome barriers imposed by the country's exit from the European Union free-trade bloc.
A Ford spokesman declined to comment on the remarks by the Ford Cologne works council.
"We welcome the support of the UK Government through its Automotive Transformation Fund but have nothing more to add," a Ford spokesman said.
Ford received 30 million pounds from the British government backed fund to help convert the Halewood plant, the Financial Times reported.
Ford did not comment on which vehicles will use the EV parts built in Halewood, although initially the automaker is expected to use them in its electric vans.
Ford's Cologne-built electric car will be underpinned by Volkswagen Group's MEB electric-only platform shared with the VW ID3 hatchback and VW ID4 crossover and is expected to use VW-sourced drivetrain components.
Ford will produce a full-electric version of the Transit Custom van starting next year from 2023 at its factory in Kocaeli, Turkey.
The company has also said it will produce a new small van range in Craiova, Romania including a full-electric version from 2024. The company has not disclosed details of the vans, but sources said it's expected to be a replacement for the Ford Transit Courier currently built in Turkey.
Ford said in February that its passenger lineup in Europe will become all-electric by 2030 and it expects two-thirds of commercial van sales to be all-electric or plug-in hybrids by the same date,
The company's electrification plans for Europe also including converting two-thirds of its commercial vehicle sales all-electric or plug-in hybrid vehicles by 2030.