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The eBearing News
May 17, 2005
NSK Peterlee Hit Again by
Simultaneous Layoffs and Investment
copyright © 2005 eBearing Inc.
NSK Bearings Europe Ltd. (UK, a division of NSK Ltd., Japan) confirmed it is laying off approximately 85
workers, or about 10%, at its Peterlee, England bearing plants -- even as it plans a £16 million
investment in new plant and equipment by 2008.
Peterlee, in northeast England, is a key manufacturing hub for NSK and home to several production facilities.
Rechristened an Automotive Centre of Excellence, it is a manufacturing center for
wheel hub units destined for several European automakers. After a series of
expansions -- the latest started in mid-2003 -- production currently
approaches 200,000 hub units each month.
Other NSK operations at Peterlee produce rolling elements, forgings, ball bearings, and electric
power steering systems (NSK Steering Systems Europe, NSSE).
NSK has been producing automotive OEM hub assembly units at Peterlee for many years.
The company supplies automotive bearings to Audi, BMW, Daimler-Chrysler, Ford, GM,
Honda, Jaguar, Nissan, Opel, Peugeot, Suzuki and Toyota.
In 1998, Peterlee was the first to win a gold award from Toyota for
delivering wheel hub units with zero defects per million; recent contract wins have added high-volume
Volkswagen hub assemblies, in addition to lower volume units such as hubs for the BMW Mini.
Hub assemblies and continuing investments at Peterlee go hand-in-hand as part of NSK's stated intention
to become the global leader in production and sales of advanced Hub III wheel bearing units. Hub III units
are wheel hub units with integral electronic speed sensors.
Worldwide, NSK has detailed plans to expand Hub III production by 50% by 2008, to more than 23 million
units per year. That would translate to a 33% OEM market share.
Peterlee began producing Hub III units in 2000; NSK said its continuing investments in plant and equipment
there should boost Hub III production capacity to more than 330,000 units per year by 2008.
• article: NSK plans 50% expansion of Hub III production capacity
NSK still has not made any public announcements about where its Hub 3.5 units will be produced, although
Peterlee would be considered the leading candidate site. Hub 3.5 includes an integral CV joint.
Peterlee underwent a restructuring and consolidation in mid-2002, in part due to high-cost UK operations
turning important product lines into financial loss-leaders. With the most recent investments
and restructuring efforts, Peterlee has been cemented as a leader in wheel hub bearing production.
In that 2002 restructuring, work was realigned, some non-hub bearings were dropped, and close to 100 workers
lost their jobs as low-margin ball bearings (primarily metric deep groove) were moved to NSK Iskra in Poland.
As that restructuring was going on, Peterlee's workers were reassured the plant would continue to receive
investments and upgrades as an Automotive Centre of Excellence.
The current restructuring and investment plan comes with another major round of layoffs. The 85 workers
losing their jobs are
part of the cost-reduction effort NSK Europe had to show before additional funding would be freed up.
The workers are also victims of their own success in increasing productivity and NSK's increasing
use of integrated automation.
Before this current round of layoffs was decided, however, NSK had been maintaining it usual open offer to
all 600 Peterlee workers, offering the opportunity for
voluntary separation with a benefits package. Reportedly, fewer than 40 investigated the opportunity
this time around, and only 25 ultimately accepted. Workers at Peterlee are represented by the Amicus labor union.
NSK said, "NSK Bearings operates in an increasingly competitive market - on in which margins are continually
squeezed by increasing costs, many of which cannot be passed on to customers. In order to survive - and
thrive - in this market, the company has, sometimes, to make difficult decisions in order to sustain
its operations and ensure that there is a long-term future in Peterlee."
It went on to say, "NSK is not unique in that in order to survive, it has to be lean and
efficient. The company is embarking on a restructuring plan that will see more than £16 million
invested in Peterlee over the next few years. But that restructuring carries with it cost, and regrettably,
that means that over the next twelve months, a number of job cuts will need to be made throughout the organization.
A full workforce consultation program will be undertaken, and this is fully in line with
the NSK corporate philosophy of transparency in its dealings in every aspect of its business."
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- by Bruce A. Carr
from individual research,
tips and commercial sources.
Copyrighted material; unauthorized reproduction prohibited.
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eBearing.com ... for everything that moves™
Entire contents Copyright © 1999-2010, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered trademarks of eBearing Inc.
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