Cutbacks to car production in Britain by two major vehicle assembly groups have prompted French exterior components molder Cie. Plastic Omnium to close its site in Telford, England, losing nearly 200 jobs.
Paris-based Plastic Omnium blamed the closure on MG Rover Group's assembly shutdown last year at its Longbridge, England, plant and PSA Peugeot-Citroen's decision to stop its Peugeot 206 assembly in Ryton, England, in 2007.
Also closing is a smaller production unit at Telford, where Plastic Omnium Urban Systems Ltd., a subsidiary of the French molder's environment division, makes products such as plastic waste containers.
The unit employs fewer than 30; the auto plant has a workforce of 170. The Telford auto plant manufactures car bumpers and front-end modules.
Plastic Omnium plans to consolidate British production at a site in Measham, England, that also serves its remaining automotive customers. The move, set for fall 2007, is part of the firm's plan to cut costs in Western Europe and to develop auto business outside that region, particularly in Eastern Europe, Asia and Latin America.
Labor unions were angered when Peugeot decided to move up the Ryton plant closing from mid-2007 to January. The automaker has blamed the decision on the high cost of manufacturing the 206 model in Britain, compared with the car's low selling price in Eastern Europe and developing countries. Ryton produced some 130,000 cars in 2005.
Plastic Omnium is restructuring group production units in Western Europe. The High Tech division is consolidating regional production at its Performance Plastics Products-3P business, focusing on plants in Langres, France, and a big new plant in Valencia, Spain.
3P produces high-tech parts for the aeronautics, automotive and semiconductor/electronics sectors, and parts for pumps, valves and compressors.
Plastic Omnium is in the last stages of closing its 3P operation at Maintenon, France, and is halting production at two other French plants and one in Spain. In October, the group sold its U.S. 3P business - 3P Inc. of Houston - for $15 million to Fenner plc of Hessle, England.
Inergy Automotive Systems, Plastic Omnium's fuel-tank joint venture with Solvay SA of Brussels, Belgium, also has been restructuring, closing plants last year in Telford; Grenay and Fontaine, France; and this year in Valladolid, Spain. However, also this year, a new Inergy plant was launched in Wuhan, China.
In related news, European anti-trust authorities have given Plastic Omnium the green light to take over French composites molder Groupe Inoplast.
The European Commission approved the deal Oct. 30. Plastic Omnium agreed to raise its stake in Inoplast's parent company, Inopart, to 84 percent from 34 percent.
The EC ruling speeds Plastic Omnium's move into integrated vehicle module development and its potential for innovating with new hybrid materials. The deal also boosts Omnium's role in the auto body market. Inoplast of St. Desirat, France, designs and makes fiberglass auto hatchbacks, floors and trunk body panels as well as fiberglass-reinforced polyester truck-cab parts.
Inoplast, which employs 2,000 and recorded annual sales of 230 million euros ($286 million) in 2005, runs plants in Spain, France and Mexico. It recently acquired a 60 percent stake in Chinese composite parts producer Xieno group. Xieno generates around 20 million euros ($25.6 million) in annual sales.
The EC ruled that there will be only ``modest overlaps'' between the two companies resulting from the merger. Plastic Omnium is active in manufacturing vehicle bumpers, while Inopart ``makes only residual and declining sales of bumpers to car manufacturers.''
In April, Plastic Omnium agreed in principle to acquire the 50.1 percent share in Inopart held by Diaz SAS.