Brussels -- Proseat Group, which makes foam parts for automotive seating, is to close its plant in Hulshout, Belgium.
In a 14 Jan announcement the company, a joint venture between Belgian foam group Recticel and Canadian foamer Woodbridge, said "poor financial results for 2010 and the pessimistic prospects for the coming years," were behind the move.
Proseat also pointed out that this "structural loss is unavoidable as a result of insourcing in the automotive sector."
During a Special Works Council meeting held 14 Jan Proseat management explained that, in recent years, the Hulshout plant for cold-moulded foam, which makes foam cushions for cars, has borne the full impact of the crisis in the automotive sector.
Proseat said its management "deeply regrets this situation, but had no other choice than to announce to the members of the Works Council its intention to close the plant in Hulshout."
Hulshout employs 153 people today, 133 on permanent contracts and 20 with temporary contracts.
In its statement, Proseat said the move is unavoidable given the evolution of the sub-contracting market in the automotive sector, particularly in Belgium. "For several years now, even more car manufacturers and car seat manufacturers have decided to produce foam cushions themselves (insourcing)," the company said.
Meanwhile Proseat has always used the strategy of producing in close proximity to the customer(s), with Hulshout ideal for distribution to the two large auto manufacturers in the region -- General Motors in Antwerp and Ford in Genk. However, the former closed its doors and the latter has put its entire production of car seats, including the production of foam cushions, into the hands of Lear Corp., Proseat pointed out.
In this context, Proseat said, it has attempted to maintain a profitable activity in Hulshout, "regrettably without success."
Management tried throughout 2010 to attract production to Hulshout, from Ford (Cologne) and Toyota Boshoku (Valenciennes) among others, but said this came to nothing.
Proseat closed a seat foam plant employing 71 in Wetteren, Belgium, in 2007, but that year also expanded in Eastern Europe, via a joint venture with Foamline in Russia, and one with Johnson Controls to set up a plant in Poland as well as one in Slovakia.