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Car Parts Firm Unipart Enters Administration

Unipart Automotive, one of the UK’s leading car parts companies, has gone into administration with the loss of more than 1,400 jobs across the country.

Unipart Automotive, one of the UK’s leading car parts companies, has gone into administration with the loss of more than 1,400 jobs across the country. The business is based in Solihull and runs 180 branches around Britain. It operates under the Express Factors, Partco Autoparts and Unipart Automotive brands. Together, the group employed a total of 1,813 staff. Of these, 1,244 were made redundant immediately. Around 200 were retained in the short term to help the administrators, KPMG, with the process of winding up the company but these staff members will also be made redundant when this process if completed. Andre Page and Parts Alliance have together bought 33 Unipart branches and the balance of 361 staff will be transferred to these new employers.
KPMG had been attempting to find a buyer for the entire Unipart Automotive business but this has proved to be unsuccessful as KPMG partner and joint administrator, Mark Orton, explained: "Despite intensive efforts over the past weeks, a sale of the entire Unipart Automotive business could not be completed, and a buyer could only be found for 33 of the sites on a going-concern basis.”
Mr Orton pointed to on-going cash flow issues in the business as a significant factor in Unipart’s troubles, a factor which also deterred potential buyers. He added: "Unfortunately, the business had been experiencing financial stress for a number of years, so the level of cash and further operational restructuring required to rescue a more substantial part of the business posed too much risk for most interested parties."
The significant job losses caused by the administration were bemoaned by Unite union boss, Roger Maddison, who represents the automotive sector. He said: “This shock news is very concerning and will devastate the workforce. It is extremely disappointing that Unipart has sought administration and not an alternative buyer. Administration plunges these 1,224 workers and their families into immediate financial insecurity, denying them redundancy payments and putting their pensions at risk. We will be asking for an urgent meeting with the administrator to make sure that the interests of the workers are top of their considerations."
Unipart’s collapse is a blot on the automotive landscape at a time when the industry is otherwise thriving. New car sales have been on the increase in the UK for many months, as has car manufacture in the country. The availability of low cost finance packages has been a key driver in increasing sales and this has had a knock on effect on car production. The UK car industry exports some 80% of its output and the popularity of British-built cars in emerging markets like China has also contributed to record production levels. This has also led to an increase in demand for automotive components but the UK industry has been less able than others to boost its parts supply chain. In Germany, for example, more than 60% of parts that go into the new cars are sourced within the country. In the UK, however, that figure is nearer 40%. Despite efforts by Government and industry to boost this figure, the parts market remains extremely competitive and UK firms have to compete with cheap foreign imports. Industry insiders are pointing to this competition as being a key reason for Unipart’s demise, as the company’s margins were squeezed by overseas competitors. 
Despite the failure of Unipart Automotive, industry body the Society of Motor Manufacturers and Traders (SMMT) insists that the prospects for the UK automotive industry remain robust. A spokesman said: "We sympathise with the affected staff at Unipart Automotive and their families. The long-term prospects for the UK automotive industry as a whole are still very positive, however, with car making in the UK on course for record levels in the near future."
Administrators KPMG will now look at the options available for the disposal of the remaining assets of Unipart’s business. This will largely concern the company’s leasehold interests, as most of the stock has already been sold. Unipart Automotive is a separate company from Unipart Group, which issued a statement to emphasise its continued good health. Chairman and chief executive of Unipart Group, John Neill, said: "We are saddened by the Unipart Automotive situation and even though we sold control of this business years ago, we are concerned for the future of the employees. The group is financially strong and well placed to support its international growth strategy."

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