Bassingstoke: closures loom

Analysis by Bill Redmond

After 60 years of forklift production at Basingstoke, Linde's announcement to close its plant there next year marks the end of high volume forklift production in Britain. Job losses of 350 will follow but some 200 will remain in Basingstoke to cover sales and marketing, after-sales and administration. Production will be transferred to larger plants in mainland Europe over the next 12 months.

Linde's other remaining production plant at Merthyr Tydfil, which produces heavy duty trucks like container handlers, remains unaffected.

In a press release, KION, owner of Linde Material Handling, blames the global recession, marked by a 50% market downturn in the early months of this year, but is that the whole story?

The closure of the plant comes as no surprise to those who have watched the remorseless decline in UK truck makers' fortunes over the last 30 years. Long rumoured for closure, there were times when the Basingstoke plant worked at well below full capacity following its huge investment in new plant back in 1990.

Linde is right to say that "the high fragmentation of production in relatively small plants necessitates a concentration on major sites" to generate economies of scale but the current severe downturn is, perhaps, only one reason for the plant closure. The fact is, as explained in Forkliftaction.com News #388, Linde MH has struggled in the UK market over the last eight years, in common with many competitors, racking up accumulated pre-tax losses of over GBP22million (USD35 million), plagued by cost pressures and competitor activity. But it did not help itself by paying salaries substantially higher than the industry average.

A source within the industry also revealed problems surrounding Linde's formation of its contract management department which proved highly costly. It is also clear that the company chased sales growth at the expense of margins.

Against these problems, it cannot have escaped the directors' notice that the expansive Basingstoke site, if still owned by KION, would be worth many millions of pounds for housing development, even in the currently depressed property market.

The end of high-volume forklift production in Britain follows a long litany of failed British truck producers. Great names like Boss, Coventry Climax, Montgomerie Reid, Hamech and Bonser have all joined the ash heap of history, unable to compete in an oversupplied industry facing intensifying competition from abroad where larger, better-financed plants were more efficient.

But is that the whole story of the decline? One insider of a successful British truck maker put another interesting slant on the problem. "Lansing (as it was called before its Linde purchase in 1989) was part of that 'can do' attitude. They invented turret trucks, reach trucks and C Clamp turrets that were many times faster than today's format. It seems to me that the blandness of European bells and whistle 'improvements' has won the day over pure 'madcap inventiveness' like the Hunslet Lizard, man-up and articulated trucks."

Excluding Linde's Merthyr Tydfil plant, there remain only a few British manufacturers of niche market trucks, like the Bendi, Flexi and Sidetracker. This could be bad news for UK buyers if the Euro strengthens substantially against Sterling because most forklifts sold in Britain today come from Euro countries. Linde's closure will leave buyers nursing much higher bills if exchange rates go against them because they now have little choice.