NSK Peterlee Hit Again by Simultaneous Layoffs and Investment

NSK Bearings Europe Ltd. (UK, a division of NSK Ltd., Japan) confirmed it is laying off approximately 85 workers, or about 10%, at its Peterlee, England bearing plants -- even as it plans a £16 million investment in new plant and equipment by 2008. Peterlee, in northeast England, is a key manufacturing hub for NSK and home to several production facilities. Rechristened an Automotive Centre of Excellence, it is a manufacturing center for wheel hub units destined for several European automakers. After a series of expansions -- the latest started in mid-2003 -- production currently approaches 200,000 hub units each month. Other NSK operations at Peterlee produce rolling elements, forgings, ball bearings, and electric power steering systems (NSK Steering Systems Europe, NSSE). NSK has been producing automotive OEM hub assembly units at Peterlee for many years. The company supplies automotive bearings to Audi, BMW, Daimler-Chrysler, Ford, GM, Honda, Jaguar, Nissan, Opel, Peugeot, Suzuki and Toyota. In 1998, Peterlee was the first to win a gold award from Toyota for delivering wheel hub units with zero defects per million; recent contract wins have added high-volume Volkswagen hub assemblies, in addition to lower volume units such as hubs for the BMW Mini. Hub assemblies and continuing investments at Peterlee go hand-in-hand as part of NSK's stated intention to become the global leader in production and sales of advanced Hub III wheel bearing units. Hub III units are wheel hub units with integral electronic speed sensors. Worldwide, NSK has detailed plans to expand Hub III production by 50% by 2008, to more than 23 million units per year. That would translate to a 33% OEM market share. Peterlee began producing Hub III units in 2000; NSK said its continuing investments in plant and equipment there should boost Hub III production capacity to more than 330,000 units per year by 2008.