Car parts supplier TMS blames Brexit impact as it axes UK operation

A supplier of components to Ford and Jaguar Land Rover (JLR) is closing its UK plant after 60 years in a move that will revive the debate about the impact of Brexit on Britain’s automotive supply chain.

Sky News understands that Thermal Management Solutions Group (TMS) has notified staff that it intends to consolidate the production of its specialist thermostats at sites in France and Germany.

The decision will affect approximately 140 jobs at TMS’s site in Reading, where the company and its predecessors have operated for decades.

TMS was known as Arlington Industries before being rebranded last year following a recapitalisation backed by Cartesian Capital Group.

Among its other customers are the Renault, Nissan and Bentley brands.

TMS’s decision to close its UK facility, which is expected to be announced publicly later this week, has been driven by the need to drive operating efficiencies, which have been made more challenging by supply chain issues exacerbated by Britain’s departure from the European Union, according to one insider.

Increased paperwork and distribution cost and complexity driven by Brexit were a factor in its decision, they added, as was TMS’s need to consolidate in Europe as it moves from supplying diesel and petrol cars to hybrid and electric vehicles.

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The UK’s automotive industry has experienced mixed news since the 2016 referendum, with the bleakest shadow cast by Honda’s closure of its plant near Swindon.

By contrast, manufacturers including Ford and Nissan have preserved thousands of British jobs by announcing substantial investment in new models in the UK over the past year.

Boris Johnson is also hopeful of securing a landmark investment from the electric vehicle maker Rivian in a new factory in Britain.

Responding to an enquiry from Sky News, Mark Franckel, TMS’s group chief executive, said: “Over recent years the automotive industry has experienced unprecedented turbulence and uncertainty, with some markets hit harder than others.

“TMS has navigated these challenges, and we continue to experience strong demand for our best-in-class thermal management products from OEMs [original equipment manufacturers] and tier-one suppliers from around the world.

“It was against this challenging backdrop that the decision to transfer production from the UK to Europe was made.

“It was not taken lightly and was only made after careful deliberation and consideration of all the company’s critical stakeholders and the outlook for the industry.”

Mr Franckel added that the transfer of its UK operations would “optimise our global operating footprint to deliver a strong, resilient business that will allow us to meet the current and future demands of an extremely dynamic industry”.

“We remain excited about the industry’s electrified future and are uniquely poised to capitalise on the rapidly expanding electric vehicle market as well as the opportunities it brings to the group,” he added.

In total, TMS employs about 800 people at sites in Brazil, China and the US, as well as its European facilities.

It sells more than 30 million thermostats to the global automotive industry each year, incorporating the heritage of well-known automotive manufacturing names such as Wahler, Magal and Dauphinoise Thomson brands.

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