Hundreds lose their jobs as engineering firm collapses

FIVE hundred jobs have been axed at a major Scots engineering firm crippled by the slump in the property industry.

Lanarkshire firm WJ Harte Construction has been declared insolvent after more than 37 years in operation. Turnover at the company, which specialised in civil engineering and groundworks projects for house-builders, has tumbled from £102 million four years ago to just £40m in each of the past two years.

The firm, which employed 722 staff in total, has blamed a prolonged decline in the construction market combined with a string of bad debts caused by the failure of other construction firms, for its demise. It is shortly expected to go into administration.

However, more than 200 jobs are being retained in the short to medium term at the company’s Bothwell headquarters to fulfil a number of contracts the firm still has.

Business advisers PKF have been appointed interim managers of the firm and sister company RJT Pennant Ltd.

Anne Buchanan, corporate recovery partner at PKF, said: “It has experienced a severe reduction in turnover over the last few years as well as considerable levels of bad debt from creditors who themselves have gone bust.

“The downturn in the construction sector means the business is no longer able to operate and, unfortunately, around 500 of the employees are being made redundant.”

The demise of the firm is another major blow for Scotland’s ailing construction sector, which is thought to have shed about 30,000 jobs in the year to September 2011, including 10,000 in the space of just three months.

Ms Buchanan added: “The long-term effect of the closure of a business like this may have a serious impact on the recovery of the construction sector.

“To put this in context, the latest Scottish corporate insolvency statistics showed that 138 businesses in the construction sector went under in the first three quarters of 2011, compared with 158 for the whole of 2010 and just 72 in 2009.

“The pace of corporate failures related to construction businesses is increasing, which indicates continuing problems for the sector.”

Harry Frew, regional secretary of the Union of Construction, Allied Trades and Technicians, said: “We hope a buyer can be found and jobs preserved.

“We are seeking a meeting with the administrators to establish what the future holds for our members. The impact of these potential job losses across central Scotland will be a major blow to workers and their families.”