McKechnie Plastics Survives Financial Crisis

7 Jul 2010

All 430 staff at McKechnie Plastic Components factories in Stamford Bridge and Pickering have this week emerged from the ravages of the recession with a three per cent wage rise and the prospect of perhaps 50 more jobs over the next year. The trade union representing them, GMB,  says the company, severely hit by the crisis in the automotive industry in 2008, is reaping the fruits of commonsense industrial relations from which the whole of industry in York and North and East Yorkshire should learn lessons.

The crisis first became apparent in September, 2008, when Brian Mann, the managing director, received schedules of requests for automotive parts three months hence. “It suddenly fell off a cliff. Over that September and October work requests went down by 40 per cent. Clearly we faced a problem for 2009.”
So after the Christmas break he had a crucial meeting with the GMB. Between them they agreed to Mr Mann’s plan of action to avoid involuntary redundancies and to ride out the storm, keeping the staff’s special skills.

Not that there was much wrong at the Stamford Bridge plant whose broad range of products were largely unaffected by the recession, turning over between £15 and £16 million a year. Yet everyone, at both Stamford Bridge and Pickering, was to endure a wage freeze and ban on overtime. However, Pickering workers, whose projects were linked to major car manufacturers and key motor industry suppliers, agreed also to work a four-day week.

But Mr Mann said: “In return I guaranteed that there would be no more job losses or compulsory redundancies in 2009.” He also promised to thaw the wage freeze when things got better. They all stuck it out, even when the Pickering plant dipped to a loss of £600,000. But while other manufacturers went out of business, McKechnie was able to pick up about £500,000 worth of their lost orders through survival of the fittest. More importantly, the orders from the likes of Jaguar/Land Rover, Ford and system suppliers like Plastic Omnium and Magna gradually returned, and the loss at Pickering turned into a £900,000 profit this year.

Between January and June last year turnover at Pickering was just short of £6 million. Over the same period this year sales have soared to £11.2 million, with the demand from accelerating for car interior products, sills, engine covers, dashboards, door claddings and headlamp surrounds. By last Christmas all the workers were back on a five-day week and now, where the numbers at Pickering were down to 179 at the start of the crisis, the headcount is 270. But about 50 more are expected to be recruited at both sites over the next year to meet the demand of the LRX, the new “green” Land Rover, which comes into showrooms in June next year. Meanwhile… everyone is getting a rise.

Steve Huckerby, the Yorkshire regional officer for the GMB, said: “This is a real feelgood story and an object lesson in how management and workers can co-operate in a crisis.”

Mr Mann said: “The lesson of all this is that it pays to be honest, truthful and upfront and tell people how it is and then to offer trust on both sides.”

From: ‘Yorkshire Evening Post’