UK: SWAN'S DYING DAYS.

UK: SWAN'S DYING DAYS. - Back in 1988, Swan made a trading profit of £2 million on sales of £59 million, derived from a range of electrical products and cooking pots and pans. BSR (now Astec) had earlier bought it as a way of escaping from its old record

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Last Updated: 31 Aug 2010

Back in 1988, Swan made a trading profit of £2 million on sales of £59 million, derived from a range of electrical products and cooking pots and pans. BSR (now Astec) had earlier bought it as a way of escaping from its old record-changer business, but in 1989, accepted a cash offer of £17.8 million from Moulinex.

Moulinex went on to invest heavily in the Birmingham plant partly because variable costs in Birmingham were lower than in France, partly because the market was swinging decisively away from spun metal kettles, Swan's traditional craft strength, to plastic jugs.

But Moulinex had also been spending heavily on other acquisitions, which resulted in the group being heavily overgeared. A new investor was needed, and in the end, the French Rallye and Casino supermarket group stepped in. A major restructuring was called for, and Jules Coulon was appointed president in January this year to carry it out.

Coulon's priority has been to cut excess capacity, and two Spanish factories have already been closed. At Birmingham, says managing director Jacques Staehli, acceptable levels of efficiency would have required further heavy expenditure to overcome the site's multiplicity of levels - or, presumably, a complete removal to a new site. 'The City Council offered us money to continue production, but the problem is not money, but overcapacity in all our plants. We therefore have to concentrate on the most modern sites to improve efficiency.' The official three months' notification of closure was sprung on the staff in April this year. The terms were not generous, being around the legal minimum, and gave the average hourly-paid worker a little over £4,600. The notification period, too, was the shortest allowed by law.

The only course that would have prevented the closure would probably have started in the 1970s, with a management that saw the global opportunities, and had the resources to exploit them, as Moulinex did post-war.

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