January 17, 2019 / 4:12 PM / 3 months ago

Philips to close its UK factory in 2020, with loss of 400 jobs

AMSTERDAM/LONDON (Reuters) - Dutch health technology company Philips (PHG.AS) said on Thursday it planned to close its only factory in Britain in 2020, with the loss of around 400 jobs, the latest firm to move manufacturing jobs out of Britain.

FILE PHOTO: Philips logo is seen in Best, Netherlands August 30, 2018. REUTERS/Piroschka van de Wouw

The move is part of a push by Philips to reduce its large manufacturing sites worldwide to 30 from 50, and a spokesman said the decision had no direct link with Britain’s decision to leave the European Union.

However, the company said in a statement that it had to “pro-actively mitigate the potential impact of various ongoing geopolitical challenges, including uncertainties and possible obstructions that may affect its manufacturing operations.”

The factory in Glemsford, Suffolk, produces babycare products, mainly for export to other European countries. Almost all its activities will move to Philips’ plant in Drachten, the Netherlands, which already employs around 2,000 workers.

“We have announced the proposal after careful consideration, and over the next period, we will work closely with the impacted colleagues on next steps,” said Neil Mesher, CEO of Philips UK & Ireland.

“The UK is an important market for us, and we will continue to invest in our commercial organisation and innovation programmes in the country.”

Once a sprawling conglomerate, Philips has transformed itself into a health technology specialist in recent years, shedding its consumer electronics and lighting divisions.

The firm has previously warned that Brexit would put Britain’s status as a manufacturing hub at risk.

Chief Executive Frans van Houten last year said that without a customs union - which has been ruled out by Prime Minister Theresa May - Philips would have to rethink its manufacturing footprint.

Britain is set to leave the EU on March 29, and politicians are at an impasse over how to do so after MPs overwhelmingly rejected May’s proposed withdrawal agreement on Tuesday.

Other firms have moved jobs out of Britain in recent weeks, sparking alarm among MPs that Brexit is impacting corporate decision-making.

Jaguar Land Rover has slashed UK jobs - mainly due to lower Chinese demand and a slump in European diesel sales - while Ford has said it will slash thousands of jobs as part of its turnaround plan.

While both decisions were driven by factors other than Brexit, each firm has also been vocal in warning of the risks of no-deal Brexit, where Britain leaves abruptly in March without a transition period.

Reporting by Bart Meijer in Amsterdam and Alistair Smout in London; Editing by Susan Fenton and David Evans

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