SKF AB (Sweden;
Stockholm:
5251R9N7)
said it will still close its uncompetitive small ball bearing manufacturing plant
in Fontenay-le-Comte, France, despite sudden and vocal opposition from Philippe de Villiers,
President of General Council of the Vendée Region.
Mr. de Villiers comes in late (some would say at least two years late, given Fontenay-le-Comte's
clearly weakening position within SKF) to the issue, but sought to inflame the situation, charging SKF
made the decision to close Fontenay-le-Comte "without any warning" and that the move is
"profoundly inhuman and immoral, sacrificing without the slightest scruple the livelihood
of 380 employees."
In addition to his Vendée Region position, Mr. de Villiers leads France's right-wing Movement For France party.
Fontenay-le-Comte is somewhat of a throwback to domestic sourced components, manufacturing
small ball bearings for electric motors and domestic appliances. At one time it had employed
well over 700 workers, but the cost of doing business in France made the bearings produced
there far too expensive on the world market -- SKF once estimated they were 20% to 40% too high.
The factory has recently been running at less than 50% capacity, even though some of the
higher-cost processes were moved to China and Fontenay-le-Comte was focusing on higher
value-added processes and products.
Mr. de Villiers took out a full-page ad in the
Financial Times to protest SKF's move.
the text of "An Open Letter to Mr Tom Johnstone" appearing in Financial Times
In his Public Letter, apparently the best argument for keeping the plant
open that Mr. de Villiers could summon is that it, "would be a gesture in favour of all those
who depend on it for their livelihood, and would save your credibility and public image."
But, he said, "The 600,000 citizens of the Vendée region all feel they are employees of
SKF; they will fight to the finish to prevent any such offshoring, and they expect an answer
and a gesture of courage in keeping with the values SKF ostensibly supports."
SKF spokeswoman, Ingalill Ostman, responded by pointing out that SKF had tried unsuccessfully to
negotiate with the unions, but they were unwilling to compromise enough to keep the factory's costs
viable in the global market, or even in comparison to other SKF facilities.