Page last updated at 08:47 GMT, Friday, 15 January 2010

Bosch to quit south Wales with the loss of 900 jobs

Bosch Miskin plant
Bosch cut 600 jobs at its Miskin plant late in 2008

About 900 jobs will be lost after the motor parts maker Bosch announced the closure of its south Wales plant.

Earlier plans being considered at the Vale of Glamorgan site had included the option of 300 job cuts or complete closure.

The firm says it has now decided to recommend closure to its board, transferring work to Hungary in 2011.

Management of the German-owned company spent Thursday informing the workforce, following three months of consultation.

In a statement, it said consultations are now being extended until February, as unions and staff attempt to thrash out redundancy terms.

Stefan Asenkerschbaumer, president of the Bosch starter motors division, said he "deeply regretted" that a "solution" could not be found for the plant, where he had previously been manager.

"I know first-hand the dedication and commitment of the employees here," he said.

"Therefore, this is for me personally one of the toughest decisions in my career."

The company said it was facing the worst economic downturn for decades, saying that this had "left its mark on the Bosch Group".

It said that compared to 2008, sales of its alternator products made at the site near Miskin were down 45% in 2009.

Ieuan Wyn Joens said the assembly government was disappointed over the Bosch decision

"Without structural adjustment the long-term commercial future of the whole division is at serious risk," added Dr Asenkerschbaumer.

Bosch warned the workforce in September last year that jobs were at risk unless demand and sales improved.

In 2008, the firm laid off 600 contracted and agency staff at the site.

Announcing the 90-day consultation in October, it warned that it expected a sales decline to continue, slashed by up to 65% in 2010.

The union Unite, which represents much of the workforce at the site said it had spent the last three months in detailed discussions with the company, in a bid to save the plant.

Nick Servini graphic
Nick Servini, BBC Wales business correspondent
This announcement comes at a time when, ironically, most people felt the worst of the job losses were behind us in this recession.

It should act as a sharp reminder about how difficult any economic recovery will be if a blue chip manufacturer like Bosch is pulling out of Wales next year.

And the shockwaves will be felt in many communities as workers travel to this huge plant from all over south Wales.

The blame game will inevitably begin now. Most people accept that Bosch was in a difficult position as a result of the huge fall in sales.

But critics will claim that the Miskin plant was always vulnerable with investment in the new generation of alternators going to other countries.

Regional officer David Lewis said: "We'd asked the company to look at alternative production means - they say they have done that.

"There is no opportunity there because the markets in whichever section that we talked about has unfortunately been adversely affected.

"The work simply isn't there - there's overcapacity in a great number of divisions of Bosch."

Mr Lewis said he understood that the factory would now close in the summer of 2011.

"The truth is that when the company made the (consultation) announcement in October of last year that the vast majority of employees felt there wasn't too much that we could do," said Mr Lewis.

David Lewis of the union, Unite: "Everyone is bitterly disappointed"

"I think everyone is bitterly disappointed that there's not a hope of something being retained.

"The company confirmed that they have a very skilled, a good workforce, but that doesn't take away from the destruction of people's livelihoods and the difficulties for their families.

"So, they are completely and utterly bereft I think of what they can see for the future."

Plant director Adam Willmott said move was one of "pure economics" after a feasibility study had concluded the switch to Hungary, where labour costs were 65% of those at the plant, was necessary to gain the benefit of economies of scale.

He said: "The decision today is one of pure economics and is really a not reflection at all on the workforce".

"Unfortunately over the last 18 months, we have the recessions biting, which has been a big problems for the Bosch group.

"The problem is we have really investigated it depth and with the huge cost pressures that we are facing, we really have no other chance other than to bring the production together, consolidate it, and really look for the economies of scale with the lower labour costs.

"The product we are producing is very much a commodity and it's a very, very tough market at the moment in the automotive industry."

Deputy First Minister Ieuan Wyn Jones said the assembly government was pledging its full support to the workers.

Location map
Bosch is situated in the M4 corridor in south Wales

"This is extremely disappointing news and a significant blow to the hard working and highly-skilled employees of Bosch and the wider community," he said.

"We have regularly met with senior representatives of the company, and today I met with them again to press the case for keeping the plant open. Despite our efforts, we deeply regret that Bosch have come to this decision to proceed with the option to phase out production.

"If this decision goes through, we will continue to do everything possible to help those affected, whether it is helping them find new jobs or gain new skills so they can start alternative careers."

Jane Hutt, Labour AM for the Vale of Glamorgan, said Welsh assembly officials and the first and deputy ministers had met directors visiting from Germany to tell them what help was available from the assembly government.

She said: "It's disappointing because we've offered everything.

"This is about Bosch recognising that we've invested over the last two decades to make sure that Bosch could come.

"We've done everything, the local authorities and former local authority ministers have done everything they could to make sure Bosch could be there and have the best advantage, so it's a bitter disappointment."


Here are a selection of your comments.

As an ex employee who was in at the start when the plant was being built, I am very sad to see this news. I am also very angry and upset for all the highly qualified and skilled people who have been shafted by Bosch. The Wales plant has been sacrificed to keep the inefficient Spanish plant in Tratoe, nr Bilboa open due to pacts made with the Spanish unions. One of the flagship plants, technically and performance, now has to close because of this. Absolutely disgusted that this has happened, and deeply sympathetic for the people concerned.
Phil, South Wales

I'm not an economist but isn't it plain to see that it's just not the 600 jobs that go but probably a large percentage of these people will unwillingly now have to claim from our never ending supply of benefits. There are only so many mobile phone and fast food jobs to sustain this country????
Craig, Merthyr Tydfil

There's already a Bosch plant in Hungary, which in fact has been hit last year with huge layoffs. Companies will switch countries in search of lower costs and it wil only stop when all countries providing similar conditions (skilled workforce, infrastructure, etc) will be at par with production costs. Unemployment is high here and people are taking wage cuts.
Andre, Hungary (formerly Portugal)

I wonder what incentives the Hungarian government gave Bosch? We are beginning to see the nightmare of an ecconomic model in which firms can just walk out of Wales and set up shop anywhere in the EU. Given average wages in some countries are at less than a third of those in UK and with the EU pump priming eastern Europe's infrastructure this trend is set to continue.
Julien,

Sadly, I fear this will be one of the many post-Christmas bad news stories about further cuts to production in the U.K. I sympathise with all the families that will endure the fallout from these job losses.
S East, Faringdon, Oxfordshire

This is a tragic outcome for this part of South Wales. Undoubtably there have been incentives from Hungary to move Bosch and as an ex manufacturing MD I do understand why they might well have considered this. This is not a cheap execise. Time for the Welsh Assembly to step in with bold moves to protect manufacturing in this region and perhaps central government to divert bankers bonus to something real worthwhile. It may also be time for the workforce to make a gesture in terms of a lesser remuneration. Other companies have done this, not ideal but better than nothing at all.
Howard G Davis, Pentyrch Cardiff

Don't blame Bosch blame the ridiculously high taxes in this country. You don't see all of them on your payslip for instance employers national insurance which is something like 13% of annual salary extra an employer has to pay the government to employ someone.
Adam Dee, warwickshire

Same thing has happened up here on Anglesey. Eaton Electrics closed, relocates to Austria and the biggest highest paying employer - Anglsey Aluminium (part of RTZ), closed relocating to Czech Republic(and other places)

This is part and parcel of being in the EU - there are skilled educated workforces at a fraction of the cost in eastern europe so big business abuses it.
andy williams, Holyhead, Wales, UK

If this company have the problen in sale of its product then how can it be resolved by shifting the plant to another Country, its mean it want to either reduce the cost of production or give incentive to other.
Zaheer hussain, Bradford

In five years the production will relocate to China for precisely the same reason as its now moving to Hungary. Welcome to economics 101.
Mat , Sofia, Bulgaria

so the uk pays into the eec, and now that money is going to another eec state,to take the uks jobs away ...good thinking...NOT
r edwards, malaga spain

I completely agree with Bosch's decision to leave. Britain becomes increasingly unattractive to foreign investment and not only the government should do something about it, but also the people themselves.
Alekx ,

More short term profitably decisions will ensure this poor manager's bonus for the next few years - It seems to me the recession is an excuse to resructure. Hungary needs the investment I'm sure, you can't blame them offering to work for less, I'd do the same if I were them. Perhaps in the future Brits will become economic migrants to eastern Europe, as am I to the USA.
David Gough, Seattle, WA (Formerly uk)

Once again a foreign company has found it all too easy to shut down a UK plant with the total loss of employment to all of its workers.
James, Southminster, UK

Why if things are so bad for Bosch they are finding the money to transfer all production to Hungary. Is it just that they are being given a huge incentive to transfer operations to that country, leaving behind a dedicated skilled workforce.
kelvin stone, melksham, england

A non involved person.

If there is no work for Wales.

How can they transfer work to another country?


M Rowlet, Ipswich, Suffolk



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