BOLTON suffered a major jobs blow with the news that a railway engineering firm has gone into receivership.

Workers at Horwich Castings were told yesterday that the firm had been put into administrative receivership.

In total, 83 of the 125 workers have been made redundant at the Chorley New Road site with immediate effect.

A further 30 employees will carry on working at the site for about one month to "run the business down".

Horwich Castings, the last UK manufacturer of railway brake blocks and one of biggest foundries in Europe, had major contracts to supply base plates, chairs and sleepers for railways. Major clients of the company included Balfour Beatty, Jarvis, First Engineering and Corus.

At the request of the directors of the company, Dermot Power, of BDO Stoy Hayward, has been appointed receiver.

Mr Power said: "The foundry has closed down but the railway timber business will continue to trade as a going concern.

"This receivership is indicative of the demise of the British manufacturing industry. The price of steel has more than doubled in the UK over the past year and competition from the Far East has continued to intensify.

"This was the only way forward the directors could see. By acting very promptly, the directors should be able to realise most of their debtors."

Workers say that they are "gutted" at the decision and that the announcement was "completely unexpected".

One employee said: "We melted our last metal casting on the site yesterday. Everybody assumed our jobs were safe with major railways contracts coming in.

"But we were left walking around in a daze. There's lots of men aged in their 50s who will find it hard to find alternative employment."

The firm's on-site sleeper shop, which employs approximately 12 people, could be sold as a going concern.

It is believed that a meeting was being held this morning to finalise the decision. And workers are angry at the way in which management informed employees of the news -- by announcing it in the firm's canteen and handing out benefit claim forms to fill in.

One said: "It was upsetting for them to round us up in the canteen and hand us forms to fill in.

"We are going to have to claim our benefits from the state which could take up to two months for our money to come in."

Horwich Castings was part of British Rail Engineering Limited until privatisation in 1988.

It has a long history of supplying castings for railways and won a lucrative contract in 1995 to supply base plates for use on the prestigious Jubilee Line extension.

It was acquired by Phoenix Timber Group in 1997, which transferred sleeper manufacturing to the Horwich site, creating a fully integrated business capable of producing the castings and the assembled sleepers. This was encouraged by strong customer demand for a "one-stop shop" service for products.

The last major job losses were in 1990, when 211 workers were made redundant.

Horwich councillor Bob Ronson said that the job losses were devastating for the area.

He added: "This is a real tragedy.

"It's the last remaining piece of the old locomotive works and was well-established in Horwich.

"I hope that the workers could be taken on by another company in the area and efforts are made to find them alternative employment in their line of expertise."

Phoenix Timber Group, based in Hayes, Middlesex, said it had no comment to make.

The receivers are planning to sell the business' 20-acre industrial site and any viable parts of the business, including a supplier of railway sleepers.