THE global automotive and industrial supplier Schaeffler, which employs over 92,000 people worldwide, proposes to reorganise its UK business activities as part of its excellence programme “Agenda 4 plus One”.
This programme includes a global footprint initiative that is examining the strategic and economic competitiveness and long-term sustainability of all Schaeffler locations worldwide.
As part of this initiative the Executive Board has decided to reorganise its activities in the UK. Following the proposed reorganisation, the company will retain a meaningful presence in the UK but will reduce its overall footprint and relocate some of its UK production to other existing sites outside the country.
It is anticipated that the reorganisation plans will take up to two years to implement. The global footprint analysis focused on how best to structure the business in the UK based on various factors including economic conditions, supply and demand, and the decisions OEMs are making. It also took into account that only 15 percent of the goods Schaeffler produces in the UK remain in the country, while the vast majority is exported to continental Europe. The uncertainty surrounding Brexit was one factor amongst others in the analysis of the UK market.
Juergen Ziegler, Regional CEO Europe, said: “A global business needs to regularly review market conditions and strive to optimise its footprint across different regions. The proposed measures we have taken for the UK reflect this business reality. However, we remain committed to keeping certain activities in the UK, a country that will continue to be important to us.”
Schaeffler currently has three plants in the UK, in Plymouth (Barden Corporation Ltd.), Llanelli and Sheffield, and two logistics centres, in Hereford and Sutton Coldfield.
The UK locations have a total workforce of just over 1,000 people. Sheffield, the biggest of Schaeffler’s UK locations in terms of revenues and employee numbers, will be retained in its current form. The plant assembles clutches for passenger cars and tractors. The two logistics centres, in Sutton Coldfield (Industrial products) and Hereford (Automotive Aftermarket), are located just 77 miles apart and the proposal is to combine operations at Hereford enabling various synergies and efficiencies. The majority of the office-based employees from the Sutton Coldfield location will be relocated to a leased office in the vicinity of Sutton Coldfield.
It is proposed to close the Llanelli and Plymouth sites in the medium term and relocate production to existing plants outside the UK, in the US, China, South Korea and Germany. At present, the Plymouth site mainly produces spindle bearings and machine parts for Schaeffler’s Industrial division and additionally specialised bearings for the aerospace and defense industries.
At Llanelli, mechanical tappets and special-purpose bearings are made for Automotive OEMs and selected Industrial customers. Schaeffler is now entering into statutory consultations with elected representatives for all employees at the locations affected.
Greig Littlefair, Managing Director of Schaeffler UK, said: “We are committed to having transparent and fair discussions with the employees affected by these proposals. We will also ensure our customers continue to be served and that these proposed changes create minimal disruption for them.”
Juergen Ziegler added: “The changes to our UK footprint are designed to make us more efficient by relocating parts of our production closer to where our products are used. What we are planning for the UK delivers on our ‘Agenda 4 plus One’ programme. Brexit is clearly not the single decisive factor behind our decision-making for the UK market, but the need to plan for various complex scenarios has brought forward the timing.”
Nia Griffith MP and Lee Waters AM have urged Ministers in the UK and Welsh Governments to take action to persuade Shaeffler to retain its plant in Llanelli and the 220 jobs it provides. This follows the announcement by Schaeffler Automotive that they have opened consultation with employees on plans to close their Llanelli plant over the next two years.
Llanelli Assembly Member Lee Waters has submitted a question in the National Assembly for Wales and opened dialogue with First Minister Carwyn Jones and Ken Skates AM, Cabinet Secretary for the Economy in the Welsh Government to determine what can be done to protect jobs in Llanelli.
Mr Waters raised questions at the Senedd today. Watch the video here:
Nia Griffith, MP for Llanelli, has written to Greg Clark, the Secretary of State for Business, Energy and Industrial Strategy in the UK Government, urging him to meet with Schaeffler as soon as possible and do everything he can to persuade them to keep the Llanelli plant open.
Nia Griffith MP said: “I am extremely concerned to hear that Schaeffler are planning to close their plant in Llanelli, which has been a well-established part of our community for over 60 years.
“This would mean the loss of over 200 jobs in and around Llanelli, many of which are highly-skilled, and would be a big loss for our community and local manufacturing. Lee Waters and I will do everything we can to persuade Schaeffler to keep the local plant open, and I have already written to the UK Government urging them to do the same.
“Schaeffler exports the vast majority of its UK made products to continental Europe and has cited ‘uncertainty surrounding Brexit’ as one of the factors in its decision to close the Llanelli plant. This is a damning indictment of the UK Government’s mishandling of the Brexit negotiations, as after two and a half years they still do not have a plan that gives manufacturing companies the certainty they need.”
Llanelli’s MP and AM will be using all their resources to find a way forward and, in addition to lobbying the UK and Welsh Governments, will be opening discussions with the management at Schaeffler, employees and trade unions. Schaeffler are consulting with employees on their plans over the next 45 days, and both Lee Waters and Nia Griffith are offering their support to employees during this difficult period.
Plaid Cymru AM for Mid and West Wales Helen Mary Jones said: “The closure of the Schaeffler plant and the loss of 220 Welsh jobs because of Brexit uncertainty is just the first step in the destruction of the manufacturing industry in Wales.
“With the almost identical and equally destructive Brexit policies of the Conservatives and Labour, Wales faces an economic onslaught from Brexit with our communities paying the price.
“This will be the economic reality of Brexit. We need certainty on the negotiations before March. Without clarity we will be facing a Blind Brexit, with the business critical detail decided from a position of weakness outside Europe.
“Labour must change its policy and realise that the best option for Welsh businesses is to stay in the single market and the Customs Union.
“At this time of economic turmoil Wales needs more than a lethargic Labour party and callous Conservative party, both pursuing policies in their own interest and against those of our nation.
Speaking to Llanelli Online County Councillor Deryk Cundy who represents the Bynea ward said: “The proposed closure of the plant in Bynea is devasting for the whole area including Llanelli and Swansea where many of the employees live. Already as can be seen from this article, the Welsh Government have been involved through Lee Waters who has raised our grave concerns with the First Minister.
“I have made contact with the Regeneration Team in the County Council who are also arranging a meeting with Schaeffler and I will be attending a further meeting with Nia Griffith MP and others to see if we can persuade the company to reverse its decision, or to change its plans, so that the plant may continue to operate in the area that it has always supported in the past. These jobs are essential to our area and we will do everything in our power to support the employees in retaining their workplace.”
Llanelli Town Councillor Sion Davies has described news that more than 200 jobs may be under threat in the town as ‘devastating’.
He said: “This would be a massive blow for the town and my heart goes out to the people who work at Schaeffler – and their families – at this time of uncertainty.”
“All stops must be pulled out to try and make sure such a vital employer stays put. The Welsh Government must step up to the plate and intervene to try and keep Schaeffler in Llanelli.”