Wienerberger, owner of Black Country-based brick manufacturer Baggeridge, has revealed plans to close two of its UK operations, citing the slowdown in the housing market for reduced demand.
The Austrian company, which acquired Baggeridge last year, is to mothball plants in Surrey and Devon. Neither site is a legacy of Baggeridge, whose operations are mainly centred on the Black Country.
However, Wienerberger chief executive Wolfgang Reithofer has said that if the housing market worsens then further cutbacks may be required – which could impinge on the Baggeridge operations.
Staff at the Steer Point site in Devon and Ewhurst in Surrey have been informed of the closures, which will result in the loss of 80 jobs. At the moment there are no plans for the sites to re-open.
The redundancies highlight growing concerns about the scale of job losses in the construction and manufacturing industries as Britain grapples with the severe decline in the housing sector.
The two factories accounted for around 20 per cent of Wienerberger’s total UK production capacity and the bricks were mainly destined for sites from the South West to Kent and Greater London.
Mr Reithofer said that to start with, the sales market in the UK was currently very weak and had deteriorated over the last two months. He added that although there appeared to be demand in the housing sector, the credit crunch was making the mortgage market sluggish and housebuilders were feeling the pinch.
Until demand increases it is thought unlikely the company will alter its approach and so operations are believed to remain under review.
Mr Reithofer’s stance appears to be shared by the major housebuilders who have said in the last few weeks that they have been forced to slow production on existing sales sites and shelve future sites until the market improves.