Closure of Leeds plant proposed
(Sep. 18, 2003) Hydro Aluminium Motorcast Limited has today announced proposals to close its Leeds plant. The plant is part of the Castings business unit in Hydro Aluminium Automotive.
The announcement follows a decade-long battle to win fresh orders for its specialist automotive components against fierce global competition.
The company has launched a consultation process with its 612 staff during a series of meetings held this morning at its Clarence Road plant. Operations will cease in early 2005 if the proposals are accepted with all employees, including local directors, being made redundant.
 CASTINGS: Hydro Aluminium Motorcast in Leeds produces cast aluminium engine blocks and cylinder heads. |
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Steve Watson, operations director with Hydro Aluminium Motorcast, says: "It is with deep regret we have proposed the plant's closure. It is extremely saddening to have to deliver news of this nature to employees. All our workforce has demonstrated unswerving loyalty over many years and has done its best to help the company try to meet the challenge of competing against cheaper foreign-made products.
"The simple truth is that there is global over-capacity in the automotive components industry and we cannot compete against cheaper competitors based abroad. Like many British engineering companies facing similar pressures, these factors have worked against us too often and for too long. We have not won any new orders for five years or reported a profit since 1997. Production volumes have been decreasing since then."
All but one of Hydro Aluminium's existing contracts will have been fulfilled before the proposed closure. The firm produces cast aluminium engine blocks and cylinder heads for a number of carmakers, including General Motors and Ford. The contracts that will be fulfilled before the proposed closure are for components of engines that are being phased out. At least some of the cylinder heads for the new engines are being made abroad.
Watson, who would be among those to lose their job under the proposals, adds: "I have worked at the plant for 18 years, so delivering news of this kind is far from easy: It is a very emotional time for myself and many colleagues. But despite the efforts of everyone at the plant to reduce costs and improve our competitiveness, the effects of shrinking revenues mean we have to propose closure of the plant. The whole automotive components sector in the UK has suffered a downturn since the mid-1990s and unfortunately we have not been exempt from that."
The only contract due to go beyond the proposed closure date is not substantial enough to keep the plant open. "Around 85 percent of the company would be stood idle, which is simply not an option," says Watson. "To meet our obligations to our customer, this work will be completed at Hydro Aluminium's Hungarian factory in Györ.
Under the closure proposal, around half the jobs would go in 12 months, with operations gradually phased out over the following six months.
"Our aim now," says Watson, "is to ensure we work closely with employees and their representatives on all aspects of the proposed closure as well as meeting our remaining contractual requirements."
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