VEHICLE components supplier United Engineering Forgings has fallen into administration, causing concern for nearly 1,600 staff.

The group, which employs 770 staff in Bromsgrove and Kidderminster, has suffered losses in the last two years, after forming from a division of British Steel in January 1997.

A spokesman for administrator KPMG said it was hopeful of finding a buyer for the group, which supplies axle beams and crankshafts to vehicle makers.

"Staff will inevitably be worried about their jobs, but we are being reassured the firm is in administration, rather than receivership," he said.

Redundant

"However, there is always a chance that some might be made redundant."

He said the firm looked like a pretty good business but it had just been making losses.

"The administrators have only been in there 24 hours, but we're hopeful of selling the business and look to keep all staff if possible," he added.

Bob Bates, UEF's chief executive, said even though it was a difficult day for the company, it had a strong market position and a high level of customer confidence.

"The group has been in discussions with various interested parties over the last 12 months," he said.

"However, a deal could not be concluded within the necessary timescale and therefore a petition was presented for the group's administration."

UEF, which has a turnover of around £120m, employs 1,595 people in six locations.