Arlington Automotive Group, a supplier of components to carmakers including Ford, Jaguar Land Rover and Nissan have appointed Duff & Phelps.
Along with executives, they will be examining a plan to reduce the number of sites the firm owns to ensure a viable business can emerge once the pandemic is over. Bosses are confident to use the administration process to secure the needed investment.
The group employ almost 600 people across its UK sites including Birmingham, Coventry, Derby and Reading. Currently the number of employees facing redundancy is unclear though some job losses are likely.
Its customers include Aston Martin, Bentley, the maker of London’s black cabs and Alexander Dennis, the bus manufacturer.
Arlington manufactures thermostats for cars and makes and assembles engineered vehicle systems.
The UK entities which have been placed into administration are subsidiaries of Arlington International Group, encompassing operations in Brazil, China, France and the US. Joint ventures also exist in India and Turkey. None of the overseas ventures are affected by the UK restructuring, though its sister company in Germany has been going through its own insolvency process.
This becomes the first sizeable British car industry supplier to collapse due to the COVID-19 crisis, underlining the strain exerted by the outbreak on the automotive industry in Britain. The news comes just days after it was shared that the number of cars bought last month had hit the lowest in the industry since 1946.
The privately owned, Arlington Automotive Group was formed in 2013 when it bought three factories which had been operated by Remploy. Remploy was the government agency helping disabled people to find work. It was wound up eight years ago when ministers said they would switch the funding allocated to it away from factory subsides to direct assistance for eligible workers.
Joint administrator, 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."
"The UK group is underpinned by its strong core operating sites and post coronavirus will with its technology, engineering and manufacturing base it will be well positioned to take advantage of the evolving car market’’
Jimmy Saunders and Matthew Ingram are joint administrators with Allan Graham.
Is this the first of many automotive suppliers to fail?