Albion loss falls from £1.2m to just £27,000

ALBION Automotive, the venerable Glasgow-based engineering business, almost returned to profit last year as job cuts following the recession took effect.

The US-owned company, which manufactures components including axles and crankshafts for lorries and buses, recorded a loss after tax of £27,000 for 2010, down from £1.2 million the year before.

The company wound down production at its crankshaft facility at Leyland, in Lancashire, during 2010. The factory, which finally closed in June this year, had employed 46 people.

Accounts filed at Companies House show the firm spent a further £1.12m on redundancy costs last year, on top of £1.46m in 2009.

It also upped its spend on research and development, from £640,000 to £683,000, saying that “continued technology improvements and cost reductions” were necessary to mitigate the effect of downwards pressure on prices. Many of its long-term contracts to supply vehiclemakers include requirements to reduce the price over the years.

It said: “We are under continuing pressure by our customers to reduce our prices, which is common in the automotive industry.”

Albion said the financial crisis and global recession had “affected its business greatly” and continued weakness in the British and global economy could result in a further fall in automotive production with a knock-on effect on the business.

But it said it expects to feel the full benefit of its cuts and reorganisation in the current year.

Its workforce during 2010 was down 27 employees on the year before, to an average of 180.

Albion Motors was established in 1899 and merged with Leyland Motors in 1951.

A management buy-out in 1993 brought Albion Automotive back into Scottish ownership and revived the name, before it was sold once again, to an US company, American Axle & Manufacturing, in 1998.