SKF Cuts Deeper at Fontenay

SKF AB will cut at least 100 more workers from its Fontenay-le-Comte plant in France, even after chopping employment there by 200, from nearly 700 to just over 500.

The immediate cause, said SKF, is the plant's cost structure -- parts produced in France simply cost 20% to 40% more than the same components produced by SKF facilities in China.

Accordingly, production -- primarily for seals -- is being moved from France to China. The components will still be sent to Fontenay for final assembly and production.

Fontenay will continue to re-focus its operations on higher value-added production for bearings and seals.

SKF's move in France comes in parallel with the announcement that it will close the U.S. wheel bearing hub assembly manufacturing plant in Glasgow, Kentucky by 2009.

Combined, the two closings will cost approximately USD $55 million, and produce annual cost savings in the neighborhood of USD $18.5 million.

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