Power tools manufacturer Black & Decker Corp. is set to ax nearly 1,000 jobs by the end of next year at its factory in Spennymoor, England, including 55 posts from its in-house injection molding plant.
In a bid to cut costs in the face of increasing imports entering the European market from the Far East, B&D is transferring labor-intensive assembly and packaging operations to a new plant in the Czech Republic, it announced.
A B&D spokesman confirmed plans to move an unspecified number of its Krauss-Maffei injection presses to the new plant in Usti during the coming year. The Usti plant already operates 10 presses. Some component molding will remain in Spennymoor, he said.
The shift will hit a number of B&D suppliers.
``There will be very little [Black & Decker] plastics molding work [for custom molders] left in the United Kingdom in a year's time. We stand to lose around £1 million [$1.55 million] over the next year,'' said Brian Mann, managing director of McKechnie Plastic Components of Stamford Bridge, England, which molds parts for B&D's professional power tools.
Another potential loser is Stadium Plastics Ltd. of Hartlepool, England. John Pearson, Stadium managing director, estimated the business at £2 million ($3.1 million) annually.
A B&D spokesman said the firm's policy will be to continue to work with U.K. parts suppliers ``where possible and practical.''
Local molders do not expect to be able to produce parts at a low enough cost in Britain for the Czech plant, although some molders like Carclo Technical Plastics of Wakefield, England, already have plants in the Czech Republic.
The Spennymoor plant will cut 550 permanent jobs and 400 seasonal positions. The switch is part of a restructuring program launched this year that also has seen the closure of a U.S. plant, with work switched to Mexico, and the launch of the Czech facility. Some production in Mexico also is being moved to B&D's plant in China.
The Spennymoor site will continue to employ 450, down from more than 2,000 two years ago.
``Global competitive pricing pressures have been a key factor in our decision to make these changes at Spennymoor,'' said plant manager Barry Bloomer. ``We will maintain our manufacture of motors and components for plants around the world, and will remain the home of European purchasing, supply and reconditioning operations.''
The company launched in-house molding in Spennymoor in 1996 with nine Krauss-Maffei presses; today the plant has about 15.
British custom molders have been aware of the gradual shift of B&D's products to lower-cost sites for some years.
``We were massive custom suppliers [to Black & Decker] up until the year 2000, when our business was worth around £8 million [$12.4 million],'' Pearson said. Forewarned of that change, Stadium compensated with plans for increased contracts for automotive component work, which today represents around 70 percent of the custom molder's business.
Likewise, McKechnie handled about £5 million ($7.75 million) in business from B&D just five years ago.
``Three years ago, strategically, we saw the danger and the writing on the wall. We recognized we were too dependent on consumer products like the Black & Decker garden products,'' Mann said. ``They were investing in the Krauss-Maffei injection machines in-house and we reduced our exposure. We now concentrate on their professional products and offering our expertise in areas like twin-shot molding.''