Schaeffler, the global automotive and industrial supplier which employs over 92,000 people worldwide, is 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, its Executive Board has decided to reorganise its activities in the UK. This includes the proposed closure of the Llanelli and Plymouth sites in the medium term and the relocation of production to existing plants outside the UK.
Following the proposed reorganisation, the company says that it 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.
Schaeffler says that the uncertainty surrounding Brexit was one factor amongst others in the analysis of the UK market. 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 per cent of the goods Schaeffler produces in the UK remain in the country, while the vast majority is exported to continental Europe.
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, the USA, 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 defence industries. At Llanelli, mechanical tappets and special-purpose bearings are made for Automotive OEMs and selected Industrial customers.
Schaeffler says it 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.”
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.”
Schaeffler is best know to the Irish auto aftermarket for popular premium original equipment brands: LuK, INA, FAG and Ruville.