Jobs of 360 workers hang in the balance

Oct 13 2007 by Andrew Mernin, The Journal

THE jobs of 360 workers at a plastics manufacturer are hanging in the balance after the loss-making firm fell into receivership.

Hartlepool-based Stadium Plastics, which makes moulded parts mainly for the car industry, called in the receivers yesterday, although it said it would operate as normal while a buyer was sought.

Receivers Grant Thornton addressed the workforce at the plant on Tofts Farm Industrial Estate yesterday and said its priority was to stabilise the business.

The receiver also said the business had suffered losses in recent years as the amount its customers were prepared to pay for products had declined.

Stadium saw its pre-tax profits plummet from £400,000 in 2004 to a loss of £667,000 in 2005, with this figure remaining in the red last year, albeit climbing to a loss of £256,000.

Meanwhile, the firm’s turnover dropped from around £33m in 2004 to £31m last year while its tangible assets fell from £4.9m to £3.8m in the same period.

Joe McLean, administrative receiver at Grant Thornton, said: “Stadium Plastics has been in this area for 24 years and it has a good reputation but has incurred losses for a lengthy period which have manifested into cash flow problems.

“The company tried valiantly to turn it around but it was a pretty tall order. We have a number of buyers in mind but we haven’t made contact with anyone yet and it could take up to four or five months to find a buyer.” Around 110 workers at sister company Stadium Plastics Midlands in Leicestershire also face an uncertain future because of the news.

As the receiver looks for ways to save the company, it may enlist the help of regional development agency One NorthEast, which will meet with Grant Thornton representatives next week.

Ian Williams, director of business and industry at the agency, said: “We’ve spoken to the receivers and we will be meeting with them early next week.

“We need to find out more about the future plans and options for the business and the impact this may have on the employees.”

Stadium’s plunge into receivership is the latest in a series of recent blows to the North-East manufacturing industry. Last week US microchip manufacturer Atmel announced it would close its North Tyneside factory in the new year, with the loss of 600 jobs.

And yesterday we reported that bosses at Electrolux’s household cooker factory in Spennymoor have just two months to save the jobs of its 500 workers as the Swedish firm launches an investigation into the future viability of the plant.

Stadium Plastics was part of Hartlepool manufacturing giant Stadium Group plc until 2002 when it was sold off to a management buy-in team in a deal worth more than £10m.

The move, which left Stadium Group to focus on making electrical products, was led by plastics expert Jeremy Stoke and backed by cash from Lloyds TSB.