NSK Bearings Europe Ltd. (UK, a division of NSK Ltd., Japan; TSE1: 6471) publicly addressed rumors it intends to close its bearing manufacturing facility in Peterlee, UK.

Opened in 1976, Peterlee manufactures electromagnetic clutch bearings for automotive air conditioning systems, other automotive-oriented bearings, 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.

An NSK spokesman denied the plant closing rumors, saying: "Peterlee has become our flagship and we certainly have no plans to either wind down or leave the area."

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 significant investments in 2005 and 2006, Peterlee has been cemented as a leader in wheel hub bearing production.

2002 article: NSK begins European restructuring effort
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 2005 restructuring and investment plan came with another round of layoffs at Peterlee. The 85 workers losing their jobs were part of the cost-reduction effort NSK Europe had to show before additional funding would be freed up.

2005 article: NSK Peterlee hit by simultaneous investment and layoffs
The Peterlee facility currently employs approximately 450 workers, down from the 600 it had before NSK Iskra, but output is up due to increased production of hub assembly units, and the plant is scheduled for another round of investments in technology and high-value manufacturing tools.

By 2008, NSK has set a monthly production target for Peterlee of 330,000 third-generation HUB III wheel bearing units, making it the company's third largest, after Japan and the USA.

NSK said, "We have made a huge investment in Peterlee, both in money terms and skills training, and we remain highly confident in the excellent workforce."