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The Reyrolle Story: 53 - Another False Dawn

The Tyneside manufacturing firm Reyrolle continues a fight for survival.

To purchase a copy of Robert Owen's history of the firm please visit http://www.amazon.co.uk/Reyrolle-Story-History-Co-Ltd/dp/1905295073/ref=sr_1_1?ie=UTF8&s=books&qid=1245678876&sr=1-1

A possible solution was discussed by Reyrolle management during the mid 1990s, when a major competitor made two separate overtures to obtain a major interest in the Company. Unfortunately, in neither case did the discussions produce a solution acceptable to both parties. Another possible option, to increase the size of the operation by the acquisition of another medium-sized company also proved unsuccessful.

More redundancies in November 1997 stimulated further rumours in the Press about a possible closure or sale of the firm. When another 80 jobs went in August 1998, Rolls-Royce were forced to make an announcement. Spokesman Ian Cameron said; "There is no intention to close the Rolls-Royce facility at Hebburn", but he refused to be drawn on the supplementary question as to whether or not the former Reyrolle plant would be sold if a buyer could be found.

The Trade Unions and the local MP, Stephen Hepburn, were furious. The MP stated "He had been told there would be no further redundancies after the job losses in November 1997 and that he was very unhappy about the current situation."

Against this uncertain background that Rolls-Royce might sell the former Reyrolle element of their Company to an unknown and, possibly undesirable, third party, it became necessary to find a suitable buyer as quickly as possible. Opportunities were very few but on the basis of historical links and knowledge of products and customers, the Dutch company Holec and its Austrian owner ELIN seemed to offer the best opportunity.

ELIN was in turn owned by VA TECH. a technology-based engineering company from Austria with a workforce of 18,000 personnel. After much further negotiation VA TECH made a formal offer for the Rolls-Royce Transmission and Distribution Group - which included the former Reyrolle element. The offer was quickly accepted by the Rolls-Royce Board and in September 1998, the new Company was named VA TECH REYROLLE. A major headline in The Journal read "Reyrolle - Now Stronger Than Ever".

Historically, perhaps the employees owe a great deal to the management who in 1998 worked so industriously against all odds to find a new home for Reyrolle, when it became an unwanted Rolls-Royce resource.

A coincidence that emerged after the sale was that ELIN already owned NV Hazemeyer of Hengelo Holland. Hazemeyer was the first company in Europe to be granted a licence, on Henry Clothier's recommendation, to manufacture Reyrolle switchgear way back in 1924. What goes around comes around!

Speaking minutes after the £137million buy-out by VA TECH, Reyrolle Managing Director, Dr Stan Jones, said "The future of the firm is bright and no major redundancies are anticipated". The 1300 workforce relaxed for the first time in months. Unfortunately it was yet another false dawn.


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