Ginetta spins off as debts take toll

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GINETTA yesterday became the second British sports car company to run into trouble in five weeks, when the directors asked its bankers to appoint a receiver, writes David Bowen.

The Scunthorpe-based company, which was founded in 1958 by the Walkett brothers and has a reputation for producing fast but unsophisticated small sports cars, was brought down by high financing costs and the expense of developing a new model.

David Stokes, joint administrative receiver with Cork Gully, said he had received half a dozen expressions of interest, even though the company has not yet been advertised. 'I very much hope we will be able to sell it as a going concern,' he said. 'It has a great deal of goodwill and has not been run into the ground.'

The company's problems bear little relation to those of Jensen, which went into insolvency in mid- August. Jensen was producing an elderly model, and had received only one order in the six months before it collapsed.

Ginetta was trying to expand after a management buy-in led by Martin Phaff, which took the company over from the Walketts. The management bought a new factory and developed a new model, the G33 roadster (above). This was well received by the motoring press and sold well, notably in Japan. In 1991 Ginetta won the Autocar and Motor specialist manufacturer of the year award.

However the company built up pounds 2m of debt, and earlier this year laid off almost half its workforce.

It now has 20 workers and produces 12 cars a week. Mr Stokes said work was continuing on an updated version of the G33.

Despite the problems of Ginetta, Jensen and Lotus, which stopped producing its Elan two- seater in the summer, the overall health of the British wind-in-the- hair sports cars industry is not as bad as that of the motor industry as a whole.

Although it long ago gave up its position as supplier of sports cars to the world - a position enthusiastically grabbed by the Japanese - a dozen companies still manufacture on a small scale. Some of these, notably TVR and Morgan, are highly successful and have remained virtually unaffected by the recession.

(Photograph omitted)