Schaeffler Group to scale back UK manufacturing, logistics presence

The Schaeffler Group, best known to us as major shareholder (through holding company IHO Group) in tyre and automotive systems manufacturer Continental, has announced its intention to close two of its three plants in the UK. And Brexit, in part at least, is to blame.

The Schaeffler (UK) Ltd. automotive components plant in Llanelli and Barden Corporation Ltd. site in Plymouth, where production centres on spindle bearings and machine parts for Schaeffler’s Industrial division, will likely close within the next two years. Around 500 jobs are at risk. In addition, Schaeffler’s two UK logistics centres will be consolidated, with the Sutton Coldfield site closed and the majority of its employees relocated to a nearby leased facility.

Explaining its rationale for whittling back its UK footprint, the Schaeffler Group says it looked at economic conditions, supply and demand, and the decisions being made by OEMs. It also considered the “uncertainty surrounding Brexit,” noting that the “vast majority” of the plants’ output is exported to Continental Europe; only 15 per cent remains in the UK.

“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,” states Jürgen Ziegler, chief executive officer of the Schaeffler Group’s Europe region. Relocations will see production shift to existing Schaeffler plants in the USA, China, South Korea and Germany.

Following these reorganisation measures, Schaeffler Group production in the UK will exclusively continue at the company’s Sheffield site, where clutches for cars and tractors are assembled. Sheffield is Schaeffler’s largest UK location in terms of revenues and employee numbers. Logistics operations will be combined in Hereford, which currently handles logistics for the automotive aftermarket.

Schaeffler is now entering into statutory consultations with elected representatives for all employees at the locations affected. “We are committed to having transparent and fair discussions with the employees affected by these proposals,” says Greig Littlefair, managing director of Schaeffler UK. “We will also ensure our customers continue to be served and that these proposed changes create minimal disruption for them.”