Axe falls for over 60 staff at Stanley factory

Jun 24 2010 by Peter McCusker, The Journal

MORE than 60 jobs are being axed with the mothballing of a North East trailer factory run by a German firm, which had already cut 175 North East jobs in the last two years.

However, Schmitz Cargobull has revealed that 68 workers will stay on at its operation in Harelaw, in Stanley, County Durham.

Manufacturing will cease next month, with 66 production staff made redundant – leading to the firm’s UK customers to be supplied from its plants on the Continent.

But the 68 sales, after sales, marketing and administrative staff, who are mainly in County Durham but also at sales centres across the UK, will be kept on. Two years ago, before the global economic slump, the business employed 300 workers.

Dave Telford, regional officer at Unite, said: “We are very disappointed. It has been a tough couple of years for the company with a shortage of orders.

“But it’s a bitter pill to swallow and we will be working with staff during the redundancy notice period to see what we can salvage from this.”

Schmitz acquired the site, which manufacturers curtain-sided and refrigerated trailers, in 1991, and counts some of the UK’s biggest retailers amongst its customers.

The Schmitz Group employs over 4,000 and has five production facilities in Germany, as well as ones in Spain, Lithuania and Stanley. The Journal revealed last week that Andreas Schmitz, a member of the German family which founded the company, had spoken to the Stanley staff earlier this month

During the meeting, he had outlined options to the workforce, including closure, mothballing, a management buy-out and maintaining the status quo.

Manufacturing will cease at the plant on July 16. The company could give no guarantee on the factory reopening. It said that the situation would be reviewed “when the semi-trailer market returns to normal levels in the UK and Ireland”.

A company statement said: “After completing a company-wide review of its production facilities throughout Europe, Schmitz Cargobull has decided to temporarily mothball its UK assembly plant in Harelaw, County Durham. Schmitz Cargobull would like to reassure customers that service will not be affected in any way.

“The company in UK will retain and develop its existing sales, service, engineering, spare parts and used trailer operations and continue to work closely with its financing arm, Cargobull Finance.”

Paul Avery, a director at the Stanley operation, said earlier: “The German parent company has struggled and they have been looking at several options to make savings.

“The company has nine production lines throughout Europe, all making similar products and, with order volumes low, it is looking at consolidating its operations.”

Before the recession, the Stanley operation was making 3,000 units every year but the global downturn of recent years has led to production volumes falling to 900 units last year.