The firm had received a loan of more than £13m from the Liverpool City Region to support it grow and create jobs
The firm is based on Knowsley Industrial Estate(Image: Liverpool Echo)
Around 70 workers have been laid off at a Merseyside company that was given a £13m loan by the Liverpool City Region – as the firm teeters on the brink of administration following the loss of a major contract.
Workers at supercar parts manufacturers Surface Transforms notified the ECHO they were laid off by email an hour before their shift started. Others declared they were turned away by management as they arrived at work.
Surface Transforms, based on Knowsley Industrial Estate, is a company which describes itself as an expert in the development and production of carbon-ceramic brake discs for supercars.
Earlier this month, the company was plunged into an existential crisis after automotive giant General Motors (GM) decided to conclude its major contract with the Merseyside firm, which was supposed to run until 2030 and which accounts for 80% of its work.
The company, one of only two manufacturers of high-performance carbon-ceramic disk brakes in the world, had been seen as a shining light in our area, described as a ‘world class manufacturer’ by Liverpool City Region Mayor Steve Rotheram. In 2023 the Knowsley firm received a loan of more than £13m from the Liverpool City Region to support it grow and create jobs.
But the decision of GM to pull its contract has left the company on the brink of administration, with as many as 70 workers already believed to have been laid off and redundancy meetings underway.
The ECHO has spoken to a number of affected workers, who have hit out at the company for the way the situation has been handled, claiming a lack of communication has led to further stress.
We understand that over the past two weeks, two out of the three production shifts that work at Surface Transforms have been laid off or stood down – amounting to between 60 and 70 staff members. Staff members notified us they remain under contract but haven’t been able to earn any money since being stood down.
Workers declared an email went out an hour before they were due to start work informing them they were being stood down and not to attconclude. Those who didn’t see the message were met by managers at the site, notifying them to turn around and go home.
One declared: “They just notified us if your name isn’t called out, just go home. We were given no notice at all. People have bills to pay.”
Another Surface Transforms worker declared: “They refapplyd to speak to employees all toobtainher. It was the worst mistake shifting here.”
The ECHO understands talks are ongoing with Unite the Union over redundancies and staff rotations for layoffs over a four-week period have been put into place. The company claims it is engaging with staff through the redundancy and layoff processes.
But workers declared the company has warned them that there are no guarantees about redundancy payments for everyone affected.
The company has hired restructuring advisers and put itself up for sale as it battles to save itself from collapse. It declares it is talking to possible “interested parties”, and last week it went back to the High Court to protect itself from creditors as those talks go on.
The Surface Transforms crisis started on March 4 when the company notified the stock market that General Motors was concludeing its brake disc contract four years early. GM built up 84% of Surface Transforms’ sales, and bought 85% of the discs it built – and had also given ST “operational support and financial assistance including advance payments of £14.4m”.
Surface Transforms declared the relocate would have “a material impact on the company’s ability to trade” and so directors had hired restructuring advisers. The company’s share price plunged more than 90% as a result.
On March 12, the business announced it was filing a Notice of Intention to Appoint Administrators (NOI) and had hired Alvarez & Marsal as restructuring advisers. Its shares were also suspconcludeed from trading on London’s AIM market.
Filing an NOI means a company is protected from action by creditors while directors and advisers plan the future of the business.
Surface Transforms also warned that job losses and layoffs might be on the way, and declared it had “initiated a cost rationalisation exercise as a consequence of the reduced production volumes” following the contract loss.
In 2023 Surface Transforms was offered a £13.2m loan by Liverpool City Region Combined Authority, through Mayor Steve Rotheram’s Urban Development Fund, to invest in new manufacturing facilities. The mayor added at the time: “This investment we’re creating will be transformational in supporting them to scale-up their operations – and create quality, highly-skilled jobs and training opportunities for local people.”
Also at the time, Surface Transforms CEO Kevin Johnson declared the funding would “enable us to execute our strategic growth plans and further strengthen our position as a leader in carbon fibre reinforced ceramic automotive brake discs.”
Surface Transforms’ accounts for 2024 displayed it had that year borrowed £5.1m of the potential £13.2m available. But it declared that “drawdowns have continued into 2025, and the company expects the full £13.2m facility to be fully utilised by the conclude of the year (2025).”
The accounts also revealed that the covenants of the loan had been breached in December 2024, but that “the LCA (Combined Authority) have been willing to waive the December breach in recognition of its temporary nature ahead of a much-improved long term outsee and it is anticipated that further waivers will be given in 2025 until revised covenants are agreed”.
The ECHO questioned the Combined Authority for an update on Surface Transforms’ financial situation and on the complaints built by Surface Transforms workers. A spokesperson declared: “We remain in dialogue with the company to fully understand the current situation. It would not be appropriate to build any further comment at this time.”
A spokesperson for Surface Transforms declared: “When General Motors informed the company that it would be re-sourcing its supply of brake discs, it created a material impact on the company’s ability to trade.
“The board commenced a strategic review and initiated a cost rationalisation exercise. That included layoffs and meaningful consultation with employees about potential redundancies, following a clearly defined legal process. All options available to the company continue to be explored to provide the best outcome for those impacted in these very difficult circumstances.”
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