Page last updated at 12:14 GMT, Friday, 19 December 2008

Wagon Automotive cutting 292 jobs

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Carmakers have cut back on production as sales have slumped

Wagon Automotive has been forced to lay off 292 workers after the UK arm of the car parts business went into administration earlier this month.

The jobs will go as the company's Walsall manufacturing plant closes after administrators Zolfo Cooper failed to sell the business.

Wagon has been hit hard by the dramatic global slump in car sales and by competition from low cost rivals.

The company fell into administration after it failed to secure new funding.

Its sister site in Coventry remains open.

"Understandably, the current trading conditions have made it very difficult to secure an ongoing commitment from Wagon's customers, and we have therefore been left with no option but to close the Brownhills facility," said Alastair Beveridge at Zolfo Cooper.

The Walsall plant makes panels and door parts for Honda, Ford, General Motors, Land Rover and Nissan, all of which have suffered sharp falls in sales.

Several of its customers have cut back production or temporarily shut plants in order to reduce their own costs.

The knock-on impact of these cutbacks are now being felt by Wagon.

Funding problems

Birmingham-based Wagon employs over 4,000 workers across Europe. Its European businesses are still operating as normal.

Shares in Wagon were suspended in October after it reported a "steep deterioration" in the European car market and said it was in funding talks with its lenders.

The firm - which is controlled by the American billionaire Wilbur Ross - failed to persuade its banks to led it more money.

The banks, led by the Royal Bank of Scotland and including Lloyds TSB, both of which are now largely controlled by the government, declined to contribute 12m euros (£10.3m; $15.2m) to a 50m-euro funding package.



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