LONDON — Spanish metal parts supplier Gestamp is closing two of its five plants in the UK as slower vehicle sales impact its production in the country, the company said.
Gestamp closed its factory in Fareham, southern England, in early March and will shut its plant in Washington, near Sunderland, northeast England, in 2021, the company said. A third plant in Cannock, central England, is being replaced by a newer, nearby facility as part of Gestamp’s restructuring of its business in the country.
The company declined to say how many employees will be affected.
Gestamp’s Washington factory had 234 employees at the end of 2018, company filings show. The number of Gestamp employees in the UK had already dropped by 219 to 2,440 last year compared with 2018, Gestamp said.
“The UK auto industry has already been impacted quite severely in the last four years, even before COVID-19,” Gestamp Chairman Francisco Riberas told Automotive News Europe.
UK vehicle production has fallen by 24 percent between 2016 and 2019, a loss equivalent to more than 400,000 cars. The UK voted to leave the European Union trading bloc in 2016 and the resulting uncertainty over the country’s relationship with its biggest trading partner has affected investment in vehicle manufacturing.
Honda will shut its Swindon plant next year, while Ford is closing an engine plant in Bridgend, Wales, this year.
The UK and EU are currently negotiating final trade terms ahead of the end of the Brexit transition period at the end of the year.
“We don’t see auto negotiation as being the most important or difficult part,” Riberas said. “Common sense says both parties would be interested in having a very good agreement with very low tariffs, but common sense is not always prevailing right now.”
In 2018 Gestamp invested 50 million pounds (56 million euros) in a new plant in Wolverhampton, near Birmingham, central England, to serve UK customers including Jaguar Land Rover, Nissan and Mini. Gestamp is in the process transitioning staff from its plant in Cannock to Wolverhampton.
“We have some smaller plants that we are consolidating into the big ones,” Riberas said.
The Wolverhampton plant will include a line making hot-stamped steel parts.
Gestamp also has plants in Newton Aycliffe, near Durham, northeast England, as well as Llanelli in South Wales.
Gestamp warned in an April 2020 financial filing that its Washington, plant could be closed “due to the cessation of one of its major projects with no replacement project currently confirmed to take its place.” Gestamp’s filing did not mention the customer. The plant supplies parts to Nissan in Sunderland as well as Mini in Oxford.
Gestamp trades under the name Gestamp Tallent in the UK. Tallent was a UK company bought by German steel group ThyssenKrupp and inherited by Gestamp when it took over ThyssenKrupp’s metal forming operations in 2011.