Fortescue axes hundreds of green jobs in UK and Australia

Fortescue (ASX: FMG) is dropping plans to manufacture electric motors in-house and moving work offshore to China in a shift that will cost hundreds of workers in the UK and WA their jobs.

The UK-based Fortescue Zero division was set to manufacture powertrains for about 400 electric mining trucks for the company’s extensive iron ore operations in the Pilbara region of WA. The company will instead be making the majority of components for the vehicles offshore in China where costs are lower and turnover times are faster.

Fortescue Zero will still be responsible for the design and development of the powertrains for the mining trucks and the first 20 battery power systems, however, manufacturing at scale will be the responsibility of a manufacturer in China.

Reportedly, the decision to move the work offshore was due to the unmatched levels of sophisticated factory automation seen in China.

Fortescue growth and energy chief executive Gus Pichot says the changes are likely to impact the workforce, with the majority of those affected in the UK.

“This is never an easy decision and Fortescue is dedicated to guiding the transition with compassion, respect and support,” he said.

“Fortescue Zero remains critical for the company’s innovation and engineering, ensuring it remains at the forefront of the green transition.”

The company is now shifting its focus to research and development.

“As we anticipated, technologies have advanced rapidly, market capability has grown and others are now ready to match our ambition,” Mr Pichot said.

“To stay at the forefront of this acceleration and maintain our competitive edge, Fortescue is shifting emphasis from in-house manufacturing to research and development, ensuring innovation moves faster and remains unconstrained.”

Last month, Fortescue announced it would split an order of 300 to 400 240t electric haul trucks between Germany’s Liebherr and China-based XCMG.

Liebherr had originally been chosen to produce all of them, with Fortescue Zero planning to manufacture the powertrains. The decision to split the order was made to diversify the company’s supply chain of battery electric trucks.

Fortescue plans to roll out autonomous, electric mining trucks across its operations at scale from next year as part of a $2.8b plan that includes the conversion of diesel trucks to electric powertrains.

Fortescue founder and executive chairman Andrew Forrest says China is scaling and manufacturing green technologies at unprecedented speed.

“Our partnerships give Fortescue access to that capability,” he said.

“This is a truly multilateral collaboration that draws on the best ideas and manufacturing capacity to deliver the lowest cost energy and tackle climate change.”