The 329-year-old Birmingham firm that made Nelson's uniform buttons has been sunk by the country's growing pensions crisis.
Eleven out of 70 jobs were axed at the military buttons and badges manufacturer Firmin & Sons in Newtown Row after administrators were called in, in an attempt to salvage the business.
Rumours that Birmingham's oldest company was in trouble have circulated in the city's business community for some time.
It was announced yesterday that the company, the holder of three Royal Warrants, had appointed administrators Nigel Price and Mark Bowen from accountants Moore Stephens to run the business.
They are keeping operations going while they attempt to find a buyer for the company, which was founded in London in 1677 and which moved to Birmingham about 200 years later.
It was believed last night that the administrators were close to clinching a deal with a prospective rescuer.
On the surface, Firmin seemed to have been doing well in recent months.
Sales rose by 16 per cent to #3.4 million in 2005 and earlier this month the company was awarded a "considerable share" of a five-year prime contract to supply buttons and badges to the Ministry of Defence.
However, long delays in finalising the contract had affected the company's cash-flow and profitability, the administrators said.
Attempts to find a partner were scuppered by the "unquantifiable" liabilities of Firmin's pension fund, which was closed to new members in 2000.
At that time, the fund was 20 per cent over-funded, but regulatory changes, longer life expectancy and rising annuity costs turned the surplus into an estimated deficit of up to #2 million.
The situation was made worse by case law that forced the company to reduce the retirement age of its male employees from 65 to 60 to avoid claims for sex discrimination.
Chairman Fred Hsu said: "The damaging circumstances facing our company are part of a systemic problem which is undermining the foundations of industry.
"Five years ago, we took the decision to preserve a nucleus of 70 out of 150 jobs and we succeeded in transforming Firmin into a modern company with a streamlined supply chain.
"A number of factors have conspired against us and the steps we have had to take were unavoidable".
As recently as late 2005, Firmin was poised to become the successor to swordmaker Wilkinson when it stopped production and closed its factory in West London.
Joint Administrator, Nigel Price said, "The employees have responded in a very positive way and, having already spoken with two interested parties, we are optimistic about the prospects of selling this unique business."
Firmin is the latest in a growing list of companies whose efforts to refinance their operations or to find joint venture partners have been wrecked by their pension liabilities.
Birmingham Chamber of Commerce and Industry last night accused the Government of "sitting on its hands" as the crisis surrounding company pension funds escalates.
"It is a terribly sad for Birmingham when a company as old and as illustrious as Firmin has to go into administration because of its pension liabilities," chamber spokesman John Lamb said.
"We have been warning for years that unless something was done, pensions deficits would start to bring companies down. Now it is happening but the Government is just sitting on its hands. It has got to do something because there is a danger that other companies will go the same way.
"It seems that for many, the only escape is to go into administration and be bought out by a company that won't inherit the pension mess."
