ONE OF the world's leading re-tread tyre specialists has gone into receivership with the loss of 112 jobs.

Union leaders are demanding urgent talks with management after receivers were called in to Colway Tyres on Wednesday.

Bosses at the County Durham firm blame a collapse in the re-tread tyre market for the closure.

Colway Tyres, in Langley Moor, near Durham City, manufactured about 1.5million remoulds each year in the mid 1990s, but had suffered from the strength of the pound and cheap imports from the Far East. It was the last British-owned tyre firm in the country.

A spokeswoman for administrators KPMG said: "As a result of the ongoing decline in the re-tread tyre market, Durham-based Colway Tyres Limited has gone into receivership.

"This long-established company has seen a fall in its domestic market of 75 per cent since 1985 and 86 per cent in its export markets.

"The company has sought to develop new products and markets to reverse its decline but has been unable to return to profit.

"KPMG Corporate Recovery in Newcastle is maintaining a core team of 24 at Colway while seeking a buyer for the business."

In the mid-90s the international re-tread industry turned out about 30 million tyres, with five million made in Britain and nearly two million from Colway Tyres alone.

Sources close to the company say it has been squeezed out of the market because new tyres make up all but 500,000 of the national market now. It is thought its closure will make it very difficult to buy remoulds in the UK.

The firm was set up in 1967 by Ray Coleman, a former wartime RAF fighter pilot, with three partners, working from scratch at Burnhope, near Stanley, employing mainly local ex-miners.

The business quickly proved successful and moved to the Littleburn Industrial Estate at Langley Moor.

A spokesman for the Amalgamated Electrical and Engineering Union (AEEU) which has about 100 members at the site, said they are demanding answers.

Davey Hall, the AEEU's regional secretary, said: "We have asked for an immediate meeting with the management and receivers in order to clarify the situation.

"It will be the union's intention to make an application for a protective award - to secure payment of wages if the company cannot pay - on behalf of AEEU members."

The firm's holding company, Environmental Waste Solutions Ltd, based in Newton Aycliffe, was also taken into receivership.

Workers at Colway Tyres said they had no inkling of their impending redundancy.

John Clough, an employee for more than eight years, said: "Everyone is depressed - especially with this coming not long before Christmas.

"They told us the receivers had come in that morning, we had to fill in some redundancy forms, then it was goodbye.

"We had no clue about this whatsoever."

l US Tyre firm Goodyear has confirmed that up to 460 jobs face the axe at its main UK plant, in Wolverhampton, warning that the industry was being hit by "severe over-capacity".

It has launched a statutory 90-day consultation with unions and the Transport and General Workers Union said it was seeking urgent talks with management to try to save the threatened lorry tyre jobs.