Wrightbus enter administration

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Alexbus12

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Sky news reporting Wrightbus are about to enter administration within the next 24 hours.
https://news.sky.com/story/boris-bus-maker-to-crash-into-administration-11818680

Boris Johnson will face his second major private sector headache this week on Wednesday with the Northern Irish bus-maker Wrightbus poised to crash into administration.

Sky News has learnt that the Ballymena-based company is expected to formally appoint Deloitte as administrator following weeks of talks with potential buyers.


Sources close to one of the bidders said on Tuesday evening that the appointment of Deloitte was "almost certain" to happen within 24 hours, putting about 1,300 jobs at risk.

The news will represent a devastating blow to Northern Ireland's manufacturing sector, with the prospects of Wrightbus being salvaged in its current form now understood to be remote.

It will prompt questions about the extent to which the government has intervened to try to support the company following the prime minister's comments several weeks ago, when he told MPs: "It was of great value to the people of this country and I think it's a great company and we will make sure, I give my assurance, we will do everything we can to ensure the future of that great UK company"

Wrightbus's descent into insolvency proceedings will come within hours of Thomas Cook's compulsory liquidation.

In the last month, Wrightbus has held talks with potential buyers including Darren Donnelly, a local transport entrepreneur; Jo Bamford, a member of the JCB-founding family; and Weichai, a Chinese industrial group.

Wrightbus counts Transport for London (TfL) and Volvo among its most significant biggest customers.

The Routemasters commissioned by Mr Johnson during his tenure as mayor of London, which became known as "Boris Buses" because of their distinctive look, are made by Wrightbus.

The company is one of Northern Ireland's most prominent exporters and its collapse would be a severe blow to the local economy following job losses at Bombardier, the aerospace group, and the crisis at shipbuilder Harland and Wolff.

Sky News revealed in July that Wrightbus had hired Deloitte, the professional services firm, to court potential buyers after a financial downturn that has left it facing heavy losses.

Annualised losses are currently running to approximately £15m, and the company may need a capital injection of at least £30m, an insider said in July.

Wrightbus has had a presence in Ballymena for decades.

Sir William Wright, who founded the company with his father in 1946, was knighted in last year's New Year Honours list for services to the bus industry and the UK economy.

In its current form, Wright Group became the world's first developer of a hybrid-electric double-decker bus in 2006.

Wright Group, which also counts the Kowloon Motor Bus company in Hong Kong among its big export customers, has already been forced into making redundancies.

In June last year, it said it was axing 95 jobs across its operations in a move which angered union representatives at Unite.

That followed an identical round of cuts three months earlier.

In addition to its bus-making unit, Wright Group encompasses a chassis design arm, EN-Drive.

Wrightbus could not be reached for comment on Tuesday.
 
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Jordan Adam

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There's also been a lot of talk about them only employing people that come from certain backgrounds.

If true, that's very backwards.
Indeed, personal life and professional life should never combine!

Another problem is prospective buyers see an outdated product page, still advertising the New Routemaster!
And yet they try and get operators to avoid buying the Eclipse 3!
 

Tetchytyke

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Many locals have been reporting how management at Wright like "wasting" money on personal projects (The church project being one of them).
Between that and only employing people of an orange hue, it's a right mess now Auntie Arlene's Stormont money has dried up.

The DUP gave them the land they're now renting to themselves, it should also be noted.
 

vicbury

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BBC News reporting that Wrightbus is almost certain to enter administration today with a week for the administrators to find a buyer.

The DUP MP Ian Paisley has said the administration of Wrightbus is now an "inevitability".

The company is suffering from cashflow problems and has been seeking investment or a new owner.

Mr Paisley said he understood administration would commence on Wednesday.
Feel very sorry for the 1,400 employees who will suffer due to management failings above them.
 

ClydeCoaster

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Very sad news and worrying time for all those working there.

If it does indeed fold, UK operators are going to be left with little choice in ADL - a similar situation to the 70s with BL? There's a gap in the market now, and I know the industry is going through a low point but when it recovers there's space - a need, in fact - for other players. I did always think VDL missed a trick not bringing the Citea to the UK.
 

Robertj21a

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A shame that Optare never seem to get their act fully together, though their new electric deckers in London are, apparently, rather good.
 

Mitchell Hurd

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This will be the relevant thread to ask, sorry - what happens to Wright vehicles staying in passenger service? For example, maintenance and spare parts etc?
 

richw

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Is this when one of those potential buyers pops back up and buys it off the administrators, at a much reduced price ?
I expect so. Isn’t it what they call a Pre-packaged administration if they do?
Or a competitor will buy up the assets cheap
 

Ken H

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Evidently bus sales have dropped in the last year.
Anyone know why that is?

A contracting market will eliminate the weakest player.

As to parts, surely most will be provided by component manufacturers, like engine and transmission makers.
 

awsnews

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As to parts, surely most will be provided by component manufacturers, like engine and transmission makers.
Whilst mechanical items from third parties should be relatively easy to source those items where the intellectual property rights belong to Wrights, even if manufactured by another company, will inevitably become harder to obtain. Without an understanding of Wrights manufacturing philosophy it is difficult to judge.
Given the immediate reduction in the workforce it would appear that any outstanding orders won't be fulfilled. Is it known which operators were still expecting deliveries?
 

Robertj21a

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Whilst mechanical items from third parties should be relatively easy to source those items where the intellectual property rights belong to Wrights, even if manufactured by another company, will inevitably become harder to obtain. Without an understanding of Wrights manufacturing philosophy it is difficult to judge.
Given the immediate reduction in the workforce it would appear that any outstanding orders won't be fulfilled. Is it known which operators were still expecting deliveries?
First - for Leeds and some stuff for Transdev. The Streetdecks for Arriva Yorkshire are, I believe, finished and most in service.
 

carlberry

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Evidently bus sales have dropped in the last year.
Anyone know why that is?

A contracting market will eliminate the weakest player.

As to parts, surely most will be provided by component manufacturers, like engine and transmission makers.
London is cutting costs so there may be less buses being ordered there, some areas are talking about franchising and that wont encourage investment, possibly Brexit (as everything else gets blamed onto that).

Engines and transmissions are easy as they're usually complete unit replacements, the real problem lie with everything else where Wrights either made them (body parts) or had various suppliers which would need to be contacted separately if the company disappeared without any kind of replacement.
 

edwin_m

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If they don't I'm sure the new company will sell parts. What happens to build-and-maintain deals will be interesting, though.
I can't imagine any operator will have paid the maintenance part of such a contract in advance, so this represents an ongoing revenue stream and if Wrights is broken up somebody would probably buy profitable contracts from the administrators. If the buses are costing more to maintain than expected then the agreed maintenance payment might not cover it and it's unlikely anyone would buy an ongoing loss-maker. In that case the maintenance contract would cease and the operator could make their own arrangements but they might end up paying more.
 

GusB

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London Reconnections has an interesting article here:
https://www.londonreconnections.com...-of-a-vision-wrightbus-enters-administration/

Questions first began to surface about the firm’s long-term viability in July, when the firm acknowledged it had begun working with Deloitte to seek either investment or a buyout, but Wrightbus’ future has looked troubled for some time. In 2018 it reported a loss of £1.7m, citing a difficult UK bus market and near non-existent overseas sales aggravated by Brexit.

Brexit had threatened, and indeed has hit, Wrightbus particularly hard. Modern bus manufacture is long-removed from the world that existed when Wrightbus was first formed after WW2. Then, it was largely about onsite engineering and limited imports. Indeed much of Wrightbus’ early growth came from creating bus-bodies to sit on existing chassis. Today, it shares the complex ‘just in time’ outsourcing and parts delivery model seen in the world of car manufacture. The drastic fall of Sterling, as well as the uncertainty over future trading arrangements with the European Union, have increased both present costs and future risks for the firm. This has made it increasingly hard to win contracts outside of the UK.

This issue has been compounded by a prolonged period of low bus-renewal within the UK. To a certain extent, the UK bus market has always been boom-and-bust for manufacturers. Buses are, by definition, built to last. Operators don’t expect the 50-year lifespans seen in railway rolling-stock. They do, however, expect to limit full fleet renewals to roughly every 15 years.
(not quoted in full)
 

Mwanesh

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The minute all the big groups switched to ADL i knew Wrights where up the creek. Arriva bought the Eclipse, Solar and Pulsar single deckers for their fleets. ADL singles you could count the places where they were found. Wrights should have made the Volvo B8 body lighter
 

LOL The Irony

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Well it's happened. https://www.bbc.co.uk/news/uk-northern-ireland-49818156
About 1,200 Wrightbus workers have been made redundant after the company entered administration.

Just 50 jobs will be retained at the firm - the last UK-owned bus manufacturer - administrators said.

The company had suffered cash flow problems and had sought investment or a new owner.

Talks with two potential buyers of the firm, best known for building the New Routemaster, known as the 'Boris Bus, failed to reach a conclusion last week.


Deloitte, the firm's administrator, said the lack of a buyer for Wrightbus had caused the redundancies.

At a press conference on Wednesday afternoon, union officials called for the immediate intervention of the British government.

They said they sought meetings with Prime Minister Boris Johnson and NI Secretary Julian Smith, who they said they must "stand up for British industry".


Susan Fitzgerald, from Unite, said Wrightbus had not been "an easy company to deal with" and said there had been a "lack of clarity".

"These workers have stuck together through thick and thin," she said.

"Boris Johnson needs to engage in a rescue plan to save these jobs."


Jackie Pollock, Unite's regional secretary, added "the government must intervene to save jobs and skills".

NI Secretary of State Julian Smith tweeted that he was "concerned to hear the news" about Wrightbus.


DUP MP Ian Paisley said it was a "body blow" for Ballymena and the wider Northern Ireland economy.

"Essentially from this point the administrator has a week to find a buyer," Mr Paisley said.

He told Good Morning Ulster that the news was "a real tragedy" for the company's 1,400 employees and "a further 1,700 people affected up and down the supply chain".

At the factory gates: 'I have nothing now'
by Richard Morgan, BBC News NI business reporter

Staff have been arriving in a steady stream at the Wrightbus facility in Ballymena this morning.

The car park at the site is almost full.

Norman Stephens has worked at Wrightbus for 30 years and said he is gutted.


"For the last five years, management has told us that they can't give us a wage rise as they were investing it in the company.

"Who is going to employ a 62-year-old man? I have nothing now. That's it.

"I'm off shift and due back in tomorrow night but I've been in since 8 o'clock hoping to find out if I've got a job."


"The administrator will need to find someone of calibre and of real standing who has the wherewithal and the skill to take this company on," he said.

Latest accounts show that the Wrightbus group lost £1.7m on a turnover of £227m in 2017.

But its financial situation has deteriorated since then.


It made two rounds of redundancies last year with 95 jobs going in February and June, which it said reflected continued low levels of demand for new buses in the UK market.

The UK has traditionally been Wrightbus's biggest market but it has been contracting for over two years.

Figures from the Society of Motor Manufacturers and Traders (SMMT) show that in the second quarter of this year new bus and coach registrations are down 30% compared to the same period last year.

That marks the tenth quarter in a row that new registrations have declined.
 

156443

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Won’t be good news for Go North East if they go under as they have a big order of Streetdecks which are supposed to be delivered within the next month or two
 

A0wen

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There's also been a lot of talk about them only employing people that come from certain backgrounds.

If true, that's very backwards.
Isn't there some requirement in NI to ensure balance across the sectarian divide which may from time to time mean there is a requirement to recruit from one community in preference to the other ?
 

awsnews

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Going beyond Wrights is this likely to impact Nu Track? Whilst they are not part of the Wrights group I am sure I have seen pictures of Nu Track vehicles being assembled in the Wright factory, does anyone know if they outsourced either part or all of their production?
 
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