More than 600 jobs at risk at BA and car parts firm

The imminent administration at Wagon Automotive and cuts by British Airways threaten more than 600 UK jobs as the chill of recession spreads from the financial sector to the manufacturing and transport industries.

Wagon, which employs more than 500 people in the UK, is set to appoint administrators for its British operations this week after car makers cut orders for Wagon's vehicle components. BA said yesterday that it would cut more than 100 jobs at Gatwick airport as part of a plan to reduce services there by 15 per cent from the middle of next year. The cuts to ground staff will be made voluntarily as aircraft based at Gatwick are reduced from 41 to 37, the airline pledged.

Wagon, controlled by the American tycoon Wilbur Ross, has plants in Walsall and Coventry and a head office in Birmingham, with a total workforce of more than 4,500 across Europe. The Walsall factory produces panels and door parts for car manufacturers inc-luding Honda, Ford and General Mot-ors. The Coventry operation makes shock absorbers for non-car-maker customers including Otis and Schind-ler. In Europe, Wagon's biggest clients are Renault, Peugeot and Citroen.

Car makers are cutting production as the economy slows and Wagon was hit by a series of reductions to output made by its clients. The final straw came when Wagon's banks refused to back the company with €12m of backing that would have kept it going for three more months. All the plants are likely to keep running until buyers are found, with only the UK operations to be put into administration this week.

Mr Ross owns about 85 per cent of Wagon after shareholders shunned a rescue rights issue in August, leaving the billionaire to pick up the unsold stock. He stepped down from the board earlier this month.