Oral - BOSCH Cardiff

Last week’s announcement that Bosch Cardiff will close is extremely disappointing news and a significant blow to the hard-working and highly skilled employees of Bosch and the wider community. Bosch has produced alternators for the automotive industry at the site for nearly 20 years. At its peak, it employed around 1,500 employees at the plant, yet over the last 18 months, staff numbers have reduced owing to declining customer demand in the automotive sector. We have been working extremely closely with the company over the last few months to look at all options available to keep the plant running and to develop other product lines to safeguard as many of the 800 full-time jobs as possible.

Following the announcement on 14 January, I met with Bosch’s senior management team to press the case for keeping the plant open. The Bosch management team outlined that the Bosch Group is currently facing the worst economic downturn for many decades and has been especially hit in the automotive sector. For the first time in 60 years, the Bosch Group will show a negative operating result. In parallel to that, Bosch is reviewing its production sites in the automotive industry as core technologies are being completely transformed to accommodate the demand for smaller, more fuel-efficient and less polluting vehicles. Bosch has consistently reinvested in the Cardiff plant over the years. Most recently, it spent €54 million on new production lines and machines between 2006 and 2009 for the production of the new alternator that was launched in 2005.

The reasons for the decision to close the Cardiff site were based on a study that began in 2007 to investigate the feasibility of the introduction of a next-generation alternator product. The final analysis showed that a new product could not be competitively manufactured in Cardiff. At the meeting, we discussed all options of possible support to Bosch in our efforts to reverse the company’s decision. However, I deeply regret that Bosch has come to the decision to proceed with the option to phase out production, in line with the reduction in customer demand and the transfer of equipment to Hungary by the summer of 2011.

While the consultation period continues until the end of February, it was agreed that we will do everything possible to help those affected by the announcement. We will outline the ReAct programme support that will assist the workforce to find alternative employment and enhance their skills. We also agreed that Bosch would provide us with a list of its Welsh supply chain to offer support to those affected by the announcement. I have also written to Bosch management in Germany, requesting a follow-up meeting.

The news illustrates how Wales, like all of western Europe and the USA, is facing intense competition in this sector from eastern Europe, China and India. That is why we are developing a new approach to the economy, through the economic renewal programme. That will move us away from a grants culture to focus more on developing the skills of our workforce and research and development. Its aim is long-term sustained development. However, manufacturing will continue to be an important part of the Welsh economy, and we more than recognise its value.