LONDON (Reuters) – The British division of global automotive supplier Arlington is making redundancies as the coronavirus outbreak forces it to appoint administrators to restructure the firm, in a sign of the pressures facing the car industry.
COVID-19 has seen car factories shut, pushing down British output by 14% so far this year, and closed dealerships, leading to a sales decline of 43%, due to lockdown measures which have restricted people’s movements since mid-March.
The company, which employs around 600 people at several locations in Britain, supplies Jaguar Land Rover, Ford and Nissan. Arlington’s operations include making bespoke thermostats and the assembly of vehicle systems.
“The financial issues faced by the Group have been compounded by coronavirus,” said joint administrator Allan Graham in a statement.
“New car registrations have fallen dramatically and the complexity of supply chains in the sector have led to a sudden halt to manufacturing.”
Restructuring acquisitions, including a German business bought last year, and uncertainty around Brexit and tariffs have also contributed to problems, according to joint administrators Duff & Phelps.
Other subsidiaries of Arlington International Group, which operates in countries such as France, Germany and China, are not affected by the restructuring in Britain.
“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,” said Arlington International CEO Mark Franckel.
Reporting by Costas Pitas; editing by Stephen Addison