Queen's Awards winning engineer battles for survival after US investor pulls out (From The Advertiser Series)
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Fears of asset stripping as Fin Machine Company in Seaham, County Durham makes 89 redundant
FEARS are rising that a Queen's Award-winning engineering firm has been the victim of asset stripping after it was placed in administration and three quarters of the workforce lost their jobs.
Administrators have given bosses at Fin Machine Company two weeks to secure a rescue deal following the shock decision by US investors to walk away from the Seaham-based company.
Last Friday, 89 staff were made redundant at Fin leaving just 27 people to run the business which designs and makes specialist components for the car and air conditioning industries.
Chief executive David Jennings, who is leading efforts to find a new buyer, told The Northern Echo that workers who have stayed on are not being paid.
"We are doing all that we can to keep the doors open," added Mr Jennings, who is getting advice from Business Durham, North East Access to Finance and Eric Lewis, an industrialist from South Wales.
A management buy-out is among the options being discussed.
Easington MP Grahame Morris is visiting the factory tomorrow (Friday) to offer his support for the firm established in 1985.
Mr Morris said it was essential that Fin's engineering expertise was retained and he intends to raise the matter at an upcoming meeting with Vince Cable, the Business Secretary.
The Labour MP added: "This is a superb business with growth potential and we need all of the skilled jobs that we can get in this part of the region.
"I was concerned when I heard the Americans had pulled out and I just hope this hasn't been an asset stripping exercise."
Mr Jennings persuaded administrator Edwin Kirker, of Kirker & Co to let Fin keep its survival hopes alive with a skeleton staff after the firm entered administration for the second time in less than six months.
Mr Jennings added. "We've now got a mini version of the business with all of the skills we had in production, design, manufacturing, HR, software and finance.
"It was terribly sad to let people go, but to their immense credit they wished us well and said they would love to rejoin the business if we can manage to turn things around."
In December, the American Industrial Acquisition Corporation (AIAC) snapped up the County Durham firm for what is understood to be a bargain £300,000 before placing it back into administration last Monday.
As a secured creditor AIAC can expect to get its investment back. The US group, which declined to comment on the deal, could also be set to earn a profit if Fin's assets and contracts are sold-off.
After initially being excited that AIAC could offer Fin a way out of its financial problems, Mr Jennings became concerned when the US group stopped returning his calls over the Christmas break.
"I had said to them: If you are having second thoughts then please tell me because we have other options on the table.
"I was very angry when they suddenly pulled the plug without giving us the chance to look at a plan b.
"I had thought they would have been a good home for the company. Instead what they have done has resulted in our reputation in the industry getting a bit of a kicking. But we will not give up."
Fin's highly-skilled research and development team produces bespoke designs for clients around the world. The firm won the 1997 Queen's Award for Export.