Bosses at the Spear and Jackson plant at Atlas in the lower Don Valley, part of the Neill Tools group, blamed the redundancies on the "credit crunch" issues of global economic uncertainty and increased costs.

The plans will affect almost half of the 140-strong workforce, who are currently being consulted on the proposals.

Production of wood saws, builders' tools and hand tools will be moved out of Sheffield, although premium hacksaw blades will continue to be manufactured at the plant.

Neill managing director Lee Wells said the company had experienced significant increases in costs over the last 18 months.

He added: "These increases have been mainly driven by global raw material price increases, rising utility costs and contributions payable into the employees' defined benefits pension plan.

"The company could not continue to absorb these increases and with the current global economic uncertainty, increasingly competitive market and improved quality standards from overseas competitors, we have found it difficult to pass the full impact of these increases on to our customers."

Mr Wells said a review of the company's strategy had been completed earlier this month, and it was felt there was no alternative but to propose changes that would realign the business with the changing market conditions.

He added: "We guarantee that as a result of the proposed manufacturing base change, high quality standards will be maintained.

"We are currently consulting with our workforce - part of this consultation will allow our employees to put forward any suggestions that may change our proposal.

"In the event no alternatives are found and our proposals are moved forward, the company will take every step to find alternative employment within the Spear and Jackson group and provide assistance during this difficult period."

Spear and Jackson is one of the largest and oldest tool manufacturers in the UK, with its roots going back to the 1740s.

The company manufactures and distributes tools, garden tools, metrology equipment, woodworking tools and magnetic equipment.

READ MORE
Your letters.
Today's features.
Latest sport.
Main news index.