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May 12, 2020

Arlington Automotive enters administration in UK

Arlington Automotive has entered administration in the UK, potentially threatening 600 jobs.

By Rhodri Morgan

Arlington Automotive has entered administration in the UK, potentially threatening 600 jobs.

The British supplier is a subsidiary of Arlington International Group, which has operations in France, Germany, Brazil, the US, China and joint ventures in India and Turkey, none of which is impacted by the UK restructuring.

Arlington counts JLR, Nissan and Ford among its customers and has sites in Coventry, Newton Aycliffe, Reading, Stourport, Birmingham and Manchester. The UK Group’s Derby site has already started closure.

The supplier’s two divisions include manufacturing of bespoke thermostats for vehicles and the manufacture and assembly of engineered vehicle systems.

Administrators, Duff & Phelps say the UK Group has grown rapidly with a number of acquisitions, which included a German business last year, the restructuring costs of which have recently placed strain on the UK Group’s cash flows.

The administrators note this was against a backdrop of wider changes, 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 an unspecified number of redundancies have been made by the joint administrators.

“The financial issues faced by the Group have been compounded by coronavirus,” said joint administrator, Allan Graham in a statement sent to just-auto.

“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 technology, engineering and manufacturing base be well positioned to take advantage of the evolving car market.”

The joint administrators are currently working with stakeholders to review options for the UK Group to ensure it can continue to trade successfully in the future.

“The UK Group has long-standing and deep rooted relationships with its customer,” added Arlington International CEO, Mark Franckel.

“I am confident 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.”

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