Partner Article

Tanfield makes recession concessions

A North East electric vehicle maker could split its operation in half as a means of helping it recover from plunging into the red and seeing turnover fall by almost £63m.

Tanfield, based in Washington, on Wearside, blamed the fall in profits – from £10.3m profit in the first half last year to a loss of £11m in the year to June 30 – on the recession, but stressed it is well-placed to recover.

As part of its recovery strategy, the group is looking at whether its two operations – Smith Electric Vehicles, which makes electric vehicles, and cherry picker-maker Powered Access – can be split into separate companies.

A Tanfield spokesman said that although no decision has been taken, such a move would position both divisions to take full advantage of opportunities in their sectors, and would lead to modest job creation.

Tanfield’s electric vehicle division recently received Government funding to further develop electric and low-carbon vehicles.

Since late last year, Tanfield has cut staff costs by 40 per cent through making about 170 redundancies and implementing short-time working hours in Washington, which now employs about 300 people.

Darren Kell, chief executive of Tanfield, said confidence remains high for the future, adding: “Sales performance across the group continues to be constrained by the global recessionary environment.

“However, we took appropriate and timely corrective action to reshape the business.

“Throughout the period we have consciously run the company for cash ahead of profitability, a strategy that has maintained the cash position, with the group still retaining a strong balance sheet.

“We continue to prepare for an eventual upturn in market demand in both our core business sectors, and are already witnessing positive developments in the Zero Emission Vehicles division.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .