Heating group warns of significant job losses from factory closure, as it announces simultaneous shake-up of sales structure
Baxi group says it will close its historic Preston foundry following its development of compact boilers with stainless steel heat exchangers and will move its production of Heatrae Sadia and Megaflo water heaters and cylinders from Norwich to the Preston site.
The manufacturer said in a statement: ”Our intention is to grow our market positions across all brands and it is therefore important that the business prepares for the many challenges and opportunities that are presented by the UK’s heating market. We have now successfully launched a new generation of compact boilers that use stainless steel heat exchangers. This, and the strategic decision to outsource aluminium heat exchangers used in some older boiler types, has led us to take the decision to close the Preston foundry in 2019.”
The company added: ”These proposals, if implemented following consultation, will, regrettably, result in significant job losses and the closure of the Norwich site. The proposed closure of the Norwich site would also result in the consolidation of R&D activity at Preston and the transfer of other support activities to other Baxi Heating UK locations. This proposal would require significant investment in the Preston site and is supported by our parent company, BDR Thermea Group. It would result in an overall increase in employment on site.”
At the same time, the company aims to simplify its sales organisation. ”Feedback from our customers suggests that they want to do business with suppliers that offer combinations of different products and brands, but with fewer points of contact. We want to reflect this and anticipate future changes in customer preferences and market needs, by consolidating our sales organisations into two areas of focus, namely residential and commercial.”
As a result, the Heatrae Sadia sales force, currently reporting into Norwich, will be integrated into the existing Residential and Commercial teams that report into Warwick and Wokingham respectively. These changes will be effective from February 2019, the firm said.
The manufacturer said: ”We recognise that these actions will have significant implications for our colleagues in Norwich and Preston. However, we firmly believe that they are necessary to make the company stronger and to place it in the best position to face the future challenges and opportunities in the UK’s heating industry.”