Automotive parts supplier enters administration

A Coventry-based automotive firm has entered administration, with redundancies already made across its sites.

Allan Graham, Jimmy Saunders and Matthew Ingram of Duff & Phelps were appointed joint administrators of the UK trading companies in the Arlington Automotive Group on 7 May.

The UK Group employs around 600 across sites in Coventry, Newton Aycliffe, Reading, Stourport, Birmingham and Manchester and is a tier one supplier to the automotive industry, counting JLR, Ford and Nissan among its’customer base. The firm’s Derby site has already started closing down.

It is a subsidiary of the Arlington International Group, which includes operations in France, Germany, Brazil, USA, China and joint ventures in India and Turkey – none of which are impacted by the UK restructuring.

Arlington’s two divisions include manufacturing of bespoke thermostats for vehicles and the manufacture and assembly of engineered vehicle systems. The UK Group has grown rapidly with a number of acquisitions in recent years which included a German business last year, the restructuring costs of which have recently placed strain on the UK Group’s cash flows.

This was against a backdrop of wider changes in the automotive sector, including Brexit uncertainty around tariffs, which led to a number of manufacturers announcing the transfer of production away from the UK. A consequence of these changes is that a number of redundancies have been made by the Joint Administrators.

Allan Graham said: “The financial issues faced by the Group have been compounded by coronavirus. New car registrations have fallen dramatically and the complexity of supply chains in the sector have led to a sudden halt to manufacturing.”

“However, the UK Group is underpinned by its strong core operating sites and post coronavirus will with its world-class technology, engineering and manufacturing base be well positioned to take advantage of the evolving car market,” he added.

Arlington International chief executive Mark Franckel also commented: “The UK Group has longstanding and deep rooted relationships with its customers and I am confident that the restructured business will be a key supplier to the automotive industry moving forwards, particularly our thermostat technology which is widely used in the rapidly growing Hybrid and Electric Car markets, which utilise a greater number of thermostat products than conventional combustion engine vehicles. We remain excited about the growth potential of these markets and Arlington’s critical position in them.”