[A-List] UK eurozone membership: capital flight

["Michael Keaney" <michael.keaney@xxxxxx>]

German fork-lift truckmaker closes plant
By Peter Marsh
Financial Times; Jan 16, 2003

A German manufacturer blamed the UK's reluctance to join the euro and the
pound's strength against the single currency as it yesterday announced the
closure of a fork-lift truck factory with the loss of 180 jobs.

The closure of the Jung-heinrich factory at Leighton Buzzard in Bedfordshire
underlines how many manufacturing operations in the UK have lost
competitiveness as sterling has risen against the euro since the late 1990s.

The announcement came just one day after a survey of the 2,000 British
subsidiaries of German companies indicated that most were continuing to
invest. In 1996, Britain was described by Hans-Peter Schmohl, Jungheinrich's
then chairman, as "the best place in Europe for a lift truck factory".

Jungheinrich is the world's fourth-biggest maker of fork-lift trucks. It is
quitting manufacturing in the UK in favour of its three existing plants in
Germany and France, but it will continue to employ nearly 1,000 people in
sales and services in Britain.

Steve Jeffs, managing director of Jungheinrich's UK arm, said the exchange
rate had placed a financial strain on the loss-making plant, which last year
made roughly 5,000 trucks with a market value of about ?100m (£65m), of
which more than half were exported. "Consolidating all our manufacturing
into the eurozone was an attraction," said Mr Jeffs.

The Hamburg-based company said the move would better insulate it from
currency fluctuations amid uncertainty about whether the UK will commit to
the euro.

Jungheinrich is shutting the Leighton Buzzard plant nine years after it
acquired it as part of the £18m takeover of Lancer Boss, a large private UK
company that had become a key force in the fork-lift truck business.

The plant employed 350 people at the time of the acquisition but this has
dwindled, while the factory boosted annual production of fork-lift trucks
from 2,500 in 1992 to 4,000 in 1996.

* There was further bad news for manufacturing after Procter and Gamble, US
consumer goods maker, said it would close its Tampax tampon plant in Havant,
Hampshire, and transfer production to Borispol, Ukraine, and Budapest, with
the loss of 330 jobs.