Coventry-based fabrication firm Lightning Aerospace entered administration late last night after feeling the effects of defence spending cuts and cash flow issues.
The company is a major supplier to body armour and combat vehicles manufacturer for the British Army NP Aerospace, which recently axed 100 jobs after being badly affected by the knock-on effect of defence spending cuts in the UK, Europe and America.
With defence secretary Phillip Hammond’s announcement yesterday that army numbers will be cut by 20%, Lightning Aerospace is in the firing line due to the reduction in supplies that will be required, and the flow-down affect through the supply chain.
Financial advisory firm Duff & Phelps have been appointed administrators to Lightning Aerospace, which is continuing to trade as a buyer is sought.
Redundancies are set to be made with a series of meetings today set to establish just how many jobs will have to be cut.
Matt Ingram and John Whitfield, partners at Duff & Phelps, were appointed joint administrators on 4 July 2012.
Matt Ingram stated: “Like many in the engineering and manufacturing sector, Lightning Aerospace has experienced difficult trading conditions in the current economic climate. The Company has suffered from a recent fall in turnover, which coupled with a high cost base, made it very difficult for the business to continue in its current form.”
Mr Ingram added that he is hopeful that the business will be able to move forwards after it has realigned its cost structure through redundancies and other restructuring.
Customers and the remaining staff are continuing to work with the administrators while a buyer is sought.