L&G halts modular homes production with 450 jobs at risk
L&G is to cease production at its timber-frame modular housing factory and will make the “majority” of its 475 staff redundant following £174 million of losses over seven years.
The insurance and pensions firm began building prefab houses at its Sherburn-in-Elmet factory, near Selby in North Yorkshire, in 2017, promising to deliver 3,500 homes a year.
But this week the company admitted it had “not been able to secure the necessary scale of pipeline” to make the business a success, and was commencing a redundancy consultation with all employees.
A statement from L&G Capital, the L&G subsidiary which owns the business, said it was “proposing to reduce business activity and cease new modular production” at the 550,000 sq ft plant, and was therefore “reviewing and assessing potential strategic options for the business”.
The statement added that the business expected to make the majority of roles redundant at the firm, though it did not say how many people were currently employed.
The statement said that given the modular factory’s significant fixed cost base, “a strong and predictable site pipeline” was required to make it a sustainable business.
But it added: “However, a number of factors, including long planning delays and the impact of recent macro events such as covid, have meant the business has not been able to secure the necessary scale of pipeline to make the current model work. Without this pipeline, it has not proved possible to build a business that can sustain the significant running costs of the large factory in Selby.”