Brexit forces German auto supplier Schaeffler to shut two UK plants

Source: Xinhua| 2018-11-07 03:58:02|Editor: yan
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BERLIN, Nov. 6 (Xinhua) -- Schaeffler Group will close two of its plants in the United Kingdom following the country's departure from the European Union (EU), the German automotive and industrial supplier announced on Tuesday.

Schaeffler told press that it was planning to close its Llanelli and Plymouth sites within the next two years and relocate production to existing plants outside the United Kingdom in Germany, China, South Korea and the United States.

UK will formally cease being a member of the EU on March 29, 2019, raising still unresolved questions over whether and how its producers and consumers will be able to access the bloc's single market from that date onwards.

Schaeffler highlighted on Tuesday that only 15 percent of the goods it produces in the UK remain in the country, while the vast majority is exported to continental Europe. Uncertainties surrounding Brexit were cited as a key factor by the company which had inspired the corporate re-organization.

"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," a statement by Juergen Ziegler, regional CEO for Europe, read.

Schaeffler currently has three British plants in total, located in Plymouth, Llanelli and Sheffield, as well as two logistics centres, in Hereford and Sutton Coldfield. The local operations have a total workforce of just over 1,000 people.

British media reported on Tuesday that up to 300 jobs could be lost in the closure of the Plymouth and Llanelli sites. Both plants are in areas which voted strongly in favor of UK leaving the EU in the 2016 referendum.

Schaeffler said that its biggest British operation in Sheffield, which assembles clutches for passenger cars and tractors, would be retained in its current form in terms of revenue and employee numbers. While being spared from outright closure, the firm's two logistics centers are scheduled to be merged into a single base in Hereford to enable "various synergies and efficiencies."