The car components industry in Wales was yesterday dealt another blow
with the announcement that at least 250 jobs are going this summer in
Cardiff with the closure of Alloy Wheels International. But the Cardiff company, which only a few years ago invested £1.2 M of pounds in the modern Alulite process at the 25 year old foundry, did not blame the Rover cutback for its closure, although the Midlands car
maker has given two new orders to rival wheel makers.
In the last fortnight, the former Camford Pressings plant and Calsonic Radiators, both at Llanelli, announced over 200 workers would be laid off due to falling orders from Rover.
South African-owned AWI, which also has a manufacturing plant in Kent
and a tool-maker in Taffs Well, blamed the closure on competition from Eastern Europe, where labour costs are significantly lower. The strength of the pound has also affected its competitiveness. In the last two years the UK arm of the international company has lost £12.6M.
Paul Merritt, Director of UK Operations, said: “We are facing pressure from countries with lower costs than ours, making it difficult for us to compete, particularly with such a strong pound. The reality is that the original equipment manufacturers are going where they can purchase cheaper wheels, and in addition many of them
are now choosing to dual source. Consequently we are not securing the orders that the Cardiff plant requires. Our disappointment is heightened when we look at the improvements in productivity and waste reduction over recent years. The quality of our workforce has enabled us to make these improvements at the Cardiff plant, but circumstances beyond our control bring us to a position where we can no longer compete”.
Alloy Wheels International Limited provides alloy wheels for vehicle
manufacturers around the world. The Cardiff plant has reduced
production over the past year, with the loss of 45 jobs. The company
recorded a loss in the UK of £7.1m in 1998 and a loss of £5.5m in 1999.
The company will now centre operations in Rochester, Kent, where it
employs 450 people. This plant will concentrate on the design,
development and manufacture of specialist large diameter diamond
turned alloy wheels, an area in which it operates successfully.
The decision to close the Cardiff site will inevitably lead to job
losses at its tool-making division in Taffs Well, but this facility
will continue as the main supplier of tooling to the company and
supply Rochester and plants in South Africa and Canada.
Management at Taffs Well only learned of the closure of the castings
facility hours before it was publicised and they will have to consider how many of their 43 workers will be made redundant.
Until yesterday, Alloy Wheels was held up as a shining example of
putting quality into practice. It made about 17,000 wheels a week at its peak and until two years ago Rover took 60% of production but it currently accounts for under 30pc.
Mr Merritt said the main competition in recent years had come from
Hungary, Czechoslovakia and Poland and rivals in Western Europe were
also making an impression on orders.
Alloy Wheels International Limited will close its Cardiff plant in
July and very few workers will be offered the chance to transfer to
The newly created Welsh Automotive Forum Task Force will be offering
its services to the workforce. Forum chief executive Tim Williams
said, “It is a bad blow but we will do all we can to help the skilled
people coming out of jobs.”
Car makers have been accused of artificially inflating the March
registrations by the leader of the dealers who sell cars. March car sales figures show the truth that only a small number of retail car buyers actually went into showrooms for the new W registrations,’ said Alan Pulham, franchised dealers’ director of the Retail Motor Industry Federation (RMI).
Certain manufacturers have clearly managed to increase their fleet
sales in a highly price-sensitive market, artificially inflating car
sales volumes in March. This is conclusive proof that Stephen Byers must announce his decision on car pricing now if we are to see a positive movement in car sales,’ Pulham said.
In the Midlands, the three local authorities which cover Rover’s giant Longbridge car plant today vowed to oppose any plans to break up and sell off the site. Birmingham City Council, Bromsgrove District Council and Worcestershire County Council said they had agreed a “joint planning framework” to ensure that Longbridge remained a single manufacturing centre.
Rover’s parent company, BMW, has agreed to sell the loss-making
British car-maker to London-based venture capitalist Alchemy Partners, which is expected to slim down the 9,000-member workforce at Longbridge.
Observers have expressed fears that Alchemy plans to sell off at least part of the 430-acre site for non-manufacturing use.