SKF, the leading knowledge engineering company, has announced that it has entered into a period of consultation with employees at its Super Precision Bearings manufacturing unit in Stonehouse, Gloucestershire, as part of a proposed plan to relocate production to existing plants elsewhere in Europe.

The Super Precision Bearings manufacturing unit forms the smaller part of the company's facilities at Stonehouse, employing approximately 80 people and occupying the site alongside the larger Aeroengine Bearings unit. The latter, together with all 200 associated jobs, is unaffected by the possible relocation plans.

The Super Precision Bearings Division has one factory in the UK and two in Italy supplying components to the machine tool sector. Demand from this sector has been in steady decline from quarter four 2008, but the rate of decline has accelerated rapidly. All of the Super Precision Bearing factories have been affected by the downturn in the market. Of the three facilities, Stonehouse is the smallest; it is the most remote from customers and the one with the weakest financial performance.

SKF's UK Managing Director, Sharon Smith, explains, "Unfortunately, we do not anticipate this trend reversing in the foreseeable future and therefore have to look at ways to reduce our production costs and overall capacity in line with market demand". To date, we have made a number of cutbacks at all three factories to try and reduce costs, but the increased severity and speed of decline in demand now leaves us with little option but to take far more drastic measures to protect the long term future of our Super Precision Bearings business as a whole".

The consultation period with unions and employees will explore all possible options to avoid relocation of production. In the event that this might occur SKF has committed itself to minimise the impact on staff, either through redeployment elsewhere in the organisation or, if redundancy is necessary, through job search workshops and support via specialised outplacement consultants.

Sharon Smith concludes, "We will do our best to find an alternative and to minimise any number of redundancies that may be necessary; for example, to date our aeroengine business has remained steady, so there may be opportunities for redeployment. We do, however, have to ensure that we safeguard the long term viability of the overall business, while continuing to provide the best combination of products and services to our customers".

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