Fears were growing today that the UK arm of a leading car parts business is to go into administration, threatening more than 500 jobs.
The Sunday Times reported that Wagon Automotive - controlled by American billionaire Wilbur Ross - has failed to persuade banks to contribute to a funding package that would have kept it running for another three months.
The report said administrators were expected to be appointed to the UK business within days, with the fate of the company's European plants still to be decided.
The company employs 4,500 people across Europe, with more than 500 people at plants in Walsall and Coventry and a head office in Birmingham. All the plants are expected to remain in operation while buyers are sought.
Shares in Wagon were suspended in October after it reported a "steep deterioration" in the European car market and said it was in talks with lenders about its funding situation. It has come under further pressure as car makers continue to cut production.
The company, which was unavailable for comment today, traces its roots back to Wagon Repairs, a business set up at the end of the First World War to maintain railway rolling stock. It was chosen by Ross as the foundation for a European car parts empire.
But the company has struggled in the face of competition from low-cost rivals and a car market slump.
At Walsall, Wagon makes panels and door parts for Honda, Ford, General Motors, Land Rover and Nissan. The smaller Coventry site makes shock absorbers for non-automotive clients, including liftmakers Otis and Schindler.
Today's report said the company's fate was sealed when banks, led by Government-backed Royal Bank of Scotland, declined to contribute 12 million euro (£10.4m) to a 50 million euro (£43.3m) funding package.
Its car making clients had put up 30 million euro (£26m) and Ross was understood to have been prepared to contribute 10 million euro (£8.7m) through the purchase of one of Wagon's subsidiaries.
The rescue fell though when the banks, which had agreed loans of 155 million euro (£134.2m) in the summer, decided against giving more.Reuse content