Quinton Hazell Cheadle sold, other sites closing

Klarius Group Limited put its Quinton Hazell Automotive Limited (QH) into administration on 6 February 2013. Following their appointment, the administrators reached an agreement to sell the Klarius emissions business based at Cheadle, Staffordshire to Klarius Products Limited, preserving 234 jobs. The deal will formally complete during the course of 7 February (today). In addition, the intellectual property rights relating to the QH business were sold separately to Tetrosyl I-Tec Limited, part of Tetrosyl Limited.

QH employed 407 in the UK before the redundancies were announced. 10 worked at the firm’s Manchester Airport headquarters, of which nine have been made redundant already. As we have seen the 234 jobs at the Cheadle, Staffordshire development and production site have been secured through the sale for the time being. Another 123 and 83 at the company’s  Glasson Dock, Lancaster and Colwyn Bay, North Wales sites are still waiting to hear what will happen to their jobs. Quinton Hazell Automotive Limited’s distribution division in Hinckley, Leicestershire will cease to operate with the loss of 42 jobs. The site employed 47 before the redundancies were announced. Further redundancies are expected at other sites around the group. Administrators KPMG report that they are assisting affected staff with claiming redundancy payments.

Paul Flint, joint administrator and associate partner at KPMG, commented: “We are pleased to announce the sale of the Cheadle site – saving 234 jobs. Despite marketing the remaining divisions for sale, we were unable to find a buyer and have taken the difficult decision to wind them down.

Prolonged pressures from competition and economic environment

Prolonged challenging trading conditions in the automotive parts sector impacted Quinton Hazell’s performance. This created cashflow pressures and affected Quinton Hazell’s ability to trade as a going concern.” The management has previously been quoted as saying that sales had been affected by competition from manufacturers in the Far East.

Manchester-based Klarius bills itself as Europe’s largest manufacturer of aftermarket car parts. The business bought the Cheadle plant in 2007, when chairman Tony Wilson acquired the European division of US-based exhausts maker Arvin Meritor in a deal understood to have been worth £12 million. It now produces more than two million replacement exhausts and catalytic converters for road cars a year. The company’s R&D operations are also located in Cheadle.

Local news sources report that the group has not filed annual accounts at Companies House since October 2011 when figures for 2010 showed a pre-tax profit of £23.3 million on sales of £202 million.

Klarius came sixth in last year’s Sunday Times HSBC International Track 200 report, which ranks business with the largest international sales.

In November 2012 the company sold its QH Ireland business to CD Group. Klarius Group operates three subsidiaries in Europe; QH France SAS, QH Deutschland and QH España. However the business pointed out that these companies are separate legal entities and have not been included in the UK administration.

Another British exhaust manufacturer, Bosal, went into administration on 11 January, citing the same macro-economic, technological and competitive pressures as Klarius.