Reproduced below are the texts of reorganisation announcements by MAN B&W Diesel Ltd published on 8th April 2005, 6th February 2003 and 18th May 2001 affecting Paxman and associated companies in the UK.
Press Release issued on 8th April 2005
Restructuring MAN B&W Diesel Ltd for higher profitability
Augsburg / Stockport, 8 April 2005.
The UK based manufacturer MAN B&W Diesel Ltd, Stockport has decided to take measures in order to improve their competitiveness. Taking into consideration the challenges of the market as well as the improvement of long-term profitability the manufacturer of high-speed diesel engines will consolidate their engine programme and optimise their production processes.
It is being taken into consideration to produce the engine series VP185, RK215 and RK270 with the support of partner companies. The production in Stockport will be improved and focus on the newly developed model RK280. In addition, the service and spare part business will be extended step by step.
The changes in the structure of the added value make it inevitable to adjust the work force from 670 to approximately 350 employees within the next twelve months. Expected financial liabilities have already been accounted for by corresponding accruals.
Source: MAN B&W Diesel Ltd website
The comments below are solely the personal opinions of this site's webmaster. They do not, in a any respect, purport or claim to represent the views of MAN B&W Diesel Ltd.
Comment: The above press release of 8th April is the third restructuring announcement made by MAN B&W Diesel Ltd in just under four years. Cutting through the public relations gloss which invariably accompanies such announcements, what is its real significance?
First, one should perhaps qualify MAN B&W Diesel's description of itself as "the manufacturer of high-speed diesel engines". Of the four engine ranges mentioned in the second paragraph of the press release, only the Paxman designed and developed VP185 would generally be considered as a high speed engine. The other three are really Ruston engines, usually described as medium speed. It will be noted there is no mention of any Mirrlees engine. The larger, slower diesels previously built by Mirrlees are covered by similar engines in MAN B&W AG's existing ranges.
Consideration of producing the VP185, RK215 and RK270 "with the support of partner companies" is taken to mean the manufacture of these engines under licence by overseas builders, probably for the most part in the Far East. MAN B&W Diesel AG, particularly through its Danish business (formerly Burmeister & Wain), has long experience of licensing manufacture of its engines but this has been predominantly with very large, slow running, two stroke marine propulsion engines. The practicalities of transporting very large engines make this an eminently logical approach, made easier by the less complex design of slow speed types and the greater manufacturing tolerances which can be permitted. It is open to question how well the licensed manufacture approach can be successfully applied to a sophisticated, state-of-the-art high speed engine like the VP185 where fine tolerances are critical and highly skilled machining and assembly are essential. The experience of MAN B&W and Mirrlees has been in the field of slow speed engines, and that of Ruston in medium speed types. Only Paxman has a tradition, based on 70 years experience, of designing, developing, and building high speed, light weight, high power diesels. This point is relevant in that, to the best of my knowledge, the best selling engine of those mentioned in the press release is the Paxman VP185.
The real meat of the announcement of 8th April is the proposal to nearly halve the workforce from 670 to 350 (a 48% reduction) over the next twelve months. It is understood the figure of 670 current employees includes all at the business's three UK locations, Stockport, Stamford, and Colchester (Paxman and Regulateurs Europa). Most of the cut backs will take place at Stockport. At present the implications for Colchester are less clear.
In 2000 MAN acquired three of the best known British companies in the field of large diesel engine manufacture. Paxman, Ruston, and Mirrlees each had expertise in its own field and its own design, development and manufacturing capabilities on its respective site. What remains of these businesses in twelve months time is anticipated to be a total workforce of only 350. It is highly doubtful whether a business of that size will have the financial or manpower resources to design and develop any major new engine. A major part of Britain's capability in the field of large diesel engineering will have been destroyed. A sorry outcome for Britain and for three companies with illustrious pasts dating back to the nineteenth century, whose names were, and still are, known and respected around the world.
Richard Carr 15 April 2005
Press Release issued on 6th February 2003
MAN B&W Diesel Ltd
Stockport, 6th February 2003.
MAN B&W Diesel Ltd, with sites at Stockport, Colchester and Stamford has today announced proposed changes to its operations. Following an assessment of the business outlook and market conditions, and to streamline capacity, the VP185 engine manufacture would be transferred from Colchester to Stockport during 2003. In addition changes to the Stockport cost structure are proposed to reflect the reduced market volumes.
These proposals could result in changes to employment levels, and regretably some job losses may be necessary, although every effort will be made within the consultations to minimise any redundancies which may arise.
At Colchester there are currently 249 employees within the High Speed Engine business of which 67 are directly within the Diesel Service function. Although VP185 manufacture would transfer to Stockport the Diesel Service function would continue to operate from the Colchester site, comprising Paxman spares and service as well as the engine overhaul facility for the Ruston and Paxman engine ranges. The business remains commited to providing a high quality after sales service to customers from the Colchester site. Diesel Service will be strengthened with the necessary support services and this will create additional job opportunities. Following the proposed changes it is anticipated that approximately 100 people would be employed at today's business levels. In addition 49 employees of Regulateurs Europa on the Colchester site are not affected by the proposed changes.
At present there are 542 employees at Stockport and 32 employees at Stamford and it is estimated that approximately 50 jobs could be at risk.
The proposals announced today are aimed at establishing the basis for a more competitive UK business and are driven by the need to balance capacity with market demand. With the recent developments in the World engine market this commitment will ensure that the business is better positioned to compete more effectively and to build a more solid base for the future. These proposals will strengthen the British engine programme in the International market.
Source: MAN B&W Diesel Ltd website
Press Release issued on 18th May 2001
MAN B&W Diesel Ltd of Stockport, Cheshire has announced plans to re-organise its engine and aftermarket businesses, and for an investment programme to develop its UK manufacturing facilities. These initiatives demonstrate the commitment of MAN B&W Diesel to the Mirrlees Blackstone, Paxman and Ruston products.
The formation of new High Speed and Medium Speed Strategic Business Units, incorporating all sales, marketing, project management, applications engineering and aftermarket activities, will provide more focused and co-ordinated support for the Marine, Industrial, Power Generation and Rail Traction markets.
The Medium Speed Business Unit will be responsible for the products of Mirrlees Blackstone and most of the Ruston products sold into power generation markets. The High Speed Business Unit will be responsible for all of the Paxman products in all markets and the Ruston products into marine, rail and some industrial applications via specialist packagers and distributors.
More than £20 million will be invested to upgrade and extend the manufacturing facilities at the Stockport site including a centralised R&D facility for all Mirrlees Blackstone, Paxman and Ruston products. Site investment will include major new machine tools, new engine assembly and test areas, a new purpose-built spare parts warehouse and centralised office facilities for the Strategic Business Units.
As part of this programme, the Company intends to progressively transfer production of the Ruston engine range to the Stockport site. The Paxman engine range will continue to be built at the existing factory in Colchester, Essex and there will be further improvement in the Colchester plant and facilities.
The management and organisation of the whole UK company will be modified to recognise the change to a Business Unit structure. The proposed changes will have an impact on people throughout the Company, and the Company recognises that the success of the new business depends on the full support of all employees throughout the process. A detailed programme of consultation with all employees, Trade Unions and representative bodies has begun.
MAN B&W Diesel Ltd is confident that this new structure will enable it to improve its service to customers and to expand business in all its markets.
Information for Editors:
MAN B&W Diesel Ltd is a wholly-owned subsidiary of MAN B&W Diesel AG of Augsburg, Germany, and currently manufactures diesel engines covering the 1-15MW power range at three independent business locations. These are Mirrlees Blackstone at Stockport, Cheshire, Ruston at Newton-le-Willows, Merseyside and Paxman at Colchester, Essex. (It also has a Foundry business at Stamford, Lincolnshire and a Controls business, Regulateurs Europa, at Colchester which are unaffected by this announcement).
18th May 2001
Page updated: 15 APR 2005