According to Automotive News Europe, Ford placed the unit in bankruptcy administration after discovering “financial irregularities.” The carmaker had been seeking to sell the business before discovering the problems at the company, which sold extended warranties and service plans through dealerships.
Customers who hold warranties backed by the unit will be covered, according to Ford and Grant Thornton, the accounting firm appointed to act as administrator.
“We’re talking about hundreds of thousands of policy holders I’m afraid,” said Oliver Rowe, spokesman for Ford of Britain.
Warranty Holdings covers the UK used car programmes of Ford and several other car brands.
Alan Pulham, director of The National Franchised Dealers Association in the UK, said that, “at the moment there is an amazing amount of no information.”
“It could be an awful lot of money. It’s frightening. Clearly this is a
suspected fraud case,” Pulham said.
Ford bought Warranty Holdings in 2001 as part of a buying spree that saw the company acquire a number of “non-core” businesses under former CEO Jacques Nasser. Ford has since sold most of those businesses, including the Kwik-Fit repair chain.
More than 350 of the 400 Warranty Holdings employees were in the UK, but the company also had operations in Turkey, Brazil, Germany, Belgium, Denmark, and Hungary. The firm was based in Waltham Cross, England, near London.