Engineering firm GKN Automotive is set to axe a plant in Birmingham, putting 519 jobs at risk.
Staff at the plant in Erdington were told today that the increasingly competitive global market means the site is no longer viable
GKN is one of the UK’s oldest engineering firms, and has owned the plant since the 1960s.
It was sold to investment firm Melrose Industries two years ago for £8.1 billion.
The firm’s other sites around the UK are not affected, its chief said in a letter to staff today.
Trade union Unite said it was seeking urgent talks over the future of the site, after it was told it would close in 18 months’ time.
A letter from GKN Automotive chief Liam Butterworth, seen by Birmingham Live, laid out the proposal to close the site.
It read: “GKN Automotive has taken the difficult decision to propose the closure of our assembly site at Chester Road, Birmingham.
“Sadly, an increasingly competitive global market means that the site is no longer viable. This is despite significant effort and investment over the past 10 years to reduce the site’s high operating costs and make it competitive.
“Supporting our people is our first priority as we consult on this proposal. Employees at the site are being notified today and support is being made available to them throughout this process. We will then commence a period of consultation with the union and employee representatives in the coming weeks.
We expect this proposal to impact 519 employees. The proposal envisages that GKN Automotive will carefully wind down the site over 18 months to ensure an orderly and stable transition of operations and give those affected time to find new work. The proposal is to transfer production to other sites in our network.”
He said the announcement would not affect other GKN Automotive facilities in the UK.
The firm’s other sites are in Minworth and Sutton Coldfield, and it also has offices in Birmingham, London and Uxbridge and an advanced engineering centre in Abingdon, Oxfordshire.
The 2018 takeover was controversial, with Erdington Labour MP Jack Dromey and Unite calling on the Government to block it.
Mr Dromey said today: “Despite all the warm words by Melrose in 2018 to protect the future prosperity of GKN and its British workforce, the cold reality three years on is that one of GKN’s finest plants now faces closure. Melrose promised a bright future to GKN’s employees – a promise they have now broken.
“This announcement is completely unexpected by employees at GKN. Working together with their trade union, Unite, I will be seeking an urgent meeting with the company.
“Government Ministers also have a responsibility to act after promises they made at the time of the hostile takeover.
“The then-Prime Minister, Theresa May, promised me on the floor of the House of Commons that the Government would always act in the UK national interest. We now face the potential of British workers seeing their jobs move abroad to one of GKN’s many continental plants.
“If this Government means what is says when it aims to level up our country, this must start here and now with an urgent solution being found to keep the plant open.”
A spokesperson from GKN Automotive said: “Proposing this closure is a difficult decision which has been made despite significant effort and investment over the past 10 years to reduce the high operating costs at the Birmingham assembly site.
“Sadly, an increasingly competitive global market means that the site is no longer viable. Supporting our people is our priority as we consult on our proposals.”
Unite said it has been told the factory will close in 18 months time.
National officer Des Quinn said: “The workforce have been left shocked and angry to learn that management is looking to close this highly viable site.
“Unite is now seeking urgent meetings with senior management at GKN to understand the business case and the logic behind this decision.
“Unite is committed to working with GKN to find a feasible solution, which will keep the factory open and preserve the jobs of this highly skilled workforce.”