500 jobs go as Carcraft falls into administration
Staff were informed of the firm’s immediate closure this morning after an 11th hour deal to save the struggling car dealer fell through.
Customers with Drive Happy Plans, warranties, MOTs, servicing and roadside assistant products will no longer be covered by the firm.
The company’s administrators Grant Thornton said that Carcraft had been making heavy losses of £8m a year for a number of years.
The firm, which sells more than 12,000 vehicles a year, has been up for sale since February but no buyer has been found.
Carcraft is the UK’s seventh largest second hand car dealer with 10 dealerships across the country.
Service advisor Tom Reekie, 24, who is one of more than 60 workers at the Leeds branch, said staff were called into a meeting at 11am this morning and told that the company had gone into administration at 10.24am.
Workers were then handed an envelope which contained information on how to claim back unused holiday pay they were entitled to.
They were then told to gather their things and leave the premises.
Transporters have called in to remove the stock, while security guards have been deployed to guard the site.
Tom said: “The main feeling is shock and anger. More anger than anything because we have not been told anything.
“We have basically just been left in limbo.
“There are guys in the workshop who have recently turned down jobs because they were told their jobs were secure. They didn’t want to leave because they liked working there.
“Many people are married with kids and it is just unfair to dump it on everyone like this.”
Carcraft’s finance arm All In One Finance Limited will enter administration in the next few days.
Daniel Smith, a partner at Grant Thornton said: “With great regret a conclusion was reached that it is no longer viable to keep Carcraft in operation.
“In order to prevent further losses it has been agreed with management and creditors to cease operations with immediate effect.
“Carcraft will retain a skeleton staff to assist with the realisation of assets.
“In the event there are any approaches from interested parties post appointment we will react to these accordingly.
“It is our intention to explore with an alternative provider whether they could provide the roadside assistance element of the Drive Happy Plan cover at a favourable rate to former customers.”
Taurn Mistry, Automotive Advisory Partner at Grant Thornton, said: “The business model has failed to evolve with the changes in the used vehicle remarketing sector and regulatory environment.
Overall, this sector is still vibrant and represents a significant opportunity for the appropriate operating model to benefit from the growing and changing used vehicle market.”