Crane maker closure axes 670 jobs
Tuesday 11 August 1998
Further pain is anticipated today with industrial gases group, BOC, expected to announce plans to make redundant 1,000 UK employees.
The decision by Grove was described by union officials as a "devastating blow" to the north east of England. They said it would have a worrying impact on other businesses.
The latest round of cuts are being blamed on the twin impact of the Asian crisis coupled with a sky-high pound which has battered British exports.
The Bank of England's decision last week not to raise interests rates brought a sigh of relief from, but no reprieve for, industry.
These problems prompt renewed questions about the wisdom of attracting so much inward investment from abroad. Car-maker Rover, owned by BMW, last month said it would be forced to make 1,500 employees redundant, blaming the strong pound.
German electronics giant, Siemens, blamed the Asian crisis for its recent decision to close its Tyneside plant with the loss of 1,100 jobs.
The closure of the Grove operation during November and December follows six years of severe financial losses. Grove was bought earlier this year from the former conglomerate, Hanson, by Keystone of the US for US$605m (pounds 373m). Grove Worldwide, with headquarters in Pennsylvania, also has manufacturing plants in US, Germany and France.
The vast majority of Grove's UK output is exported, but the company has struggled to remain competitive.
A spokesman for the GMB union blamedthe high value of the pound and the continuing high level of interest rates.
The same arguments are likely to be employed today by BOC which is expected to announce that 3,800 jobs (10 per cent of its workforce) will be cut.
BOC interim profits slumped by 17% as demand fell away for its vacuum technology business which supplies the semi-conductor business. BT Alex. Brown the BOC house broker, has forecast the BOC restructuring will lead to a pounds 130m charge and other analysts have downgraded their 1998 forecasts.
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