Administrators of a manufacturer which collapsed just days before Christmas say the company suffered from too much investment.
Pershore firms Blade Tooling Company and Blade Technology called in KPMG on December 23 after failing to get back into the black after the recession.
Buyers are being sought for the two companies, which supply original equipment manufacturers (OEMs) in the aerospace industry.
Will Wright, joint administrator and restructuring director at KPMG, said the companies had been hit by falling public sector investment – on the back of a £37 billion Government cut to defence spending – as well as a general downturn.
He told the Birmingham Post that the companies, which employ a total of 65 people, had suffered as a result of investment in growth as the sector suffered.
Mr Wright said: “It was the perfect storm for them.
“The business has been growing very rapidly. Had the business remained smaller throughout the recession then arguably it would have been better prepared for the downturn but they have invested for growth and because the market turned bleaker it cost them.”
He added: “It was partly the market and partly the business itself.
“It has been well documented that there has been a general downturn in this market over the last 18 months or so.
“There has been nothing specific. The business started losing money in January this year. It has made some losses and they have been trying to work their way out of it.
“The company supplies Rolls-Royce and other OEMs. It has got a reasonably diverse customer base and there is no specific contract it has lost.
“The business was growing very rapidly up to this year – you could argue too rapidly – but on the back of the downturn they couldn’t recover quickly enough.”
Blade Tooling, which was established in 1984, employs 57 people, while Blade Technology employs eight.
Mr Wright, who is joint administrator alongside Mark Orton, said the businesses were continuing to trade while a buyer is sought, although they closed for the Christmas period between December 24 and January 4.
No redundancies have been made at this stage at the firms, which make tools, gauges, wax pattern dies and ceramic core dies.
Mr Wright said he was confident a buyer could be found.
“Typically in a situation like this you see an under-invested facility but this is quite the opposite,” he said.
“There is a good facility, a good management team, state-of-the-art equipment and a good customer base.”
Andrew Mair, chief executive of the Midlands Aerospace Alliance, said that while defence cuts were bad news for some manufacturers the market was performing well in general.
Mr Mair added: “Most of the sector in the Midlands is more dependent on growth prospects in China and India than in the domestic market in the UK.
“Aerospace in the Midlands is one of the sectors that the Government will be looking at to grow export sales.”