Albion Automotive, the Glasgow-based components firm formed out of the failed Leyland Daf, is to expand its Lancashire factory following a big order.
Albion will spend £10m on a machining line to increase capacity and add 50 jobs to its present 714.
The contract is a £40m deal to make crankshafts for an automotive petrol engine due to go into production next year.
Albion would not reveal the identity of its customer but industry sources believe the order is from Rover – to build an expanded KV6 engine expected to be fitted in the 800 replacement.
‘The contract launches us into a new business sector – the passenger car market,’ said Jim Hastie, the chief executive of Albion Automotive.
‘We’re hoping it will lead us into new platforms,’ he said.
Albion Automotive, created by a management buyout in 1993 from Leyland Daf, has made parts for commercial vehicles. In total it employs 1,100 people.
Albion reported an increase in operating profits to more than double the previous year, from £0.57m to £1.3m.
This was partly due to the acquisition of the Farington transmission and axle operation from Volvo in 1995. Operating margins remained steady at 1% on turnover of £74.8m.
‘We’ve got to look at these results in context,’ said Hastie. ‘These are not results acceptable for a mature company where you’d expect to get 7% or 8%.
‘But we’re in profit now, and we expect to grow over the next three or four years.’