FIFTY jobs at Fraser Eagle are under threat, with bosses blaming the credit crunch.

Kevin Dean, managing director of the coach firm based at Shuttleworth Mead Business Park, Padiham, said they had recently lost a number contracts to provide rail replacement bus services which had increased pressure on the company’s cash flow.

And he said that situation had been exacerbated by other companies, which were also struggling in the credit crunch, taking longer to pay Fraser Eagle for its services.

A further blow was the fact that XL Airways, which collapsed last year, owed the Padiham firm £170,000.

Those affected from its 170-strong workforce have been laid off for an initial four weeks.

Fraser Eagle hopes to be able find extra work and take many of the staff back on.

However at the end of this period, the workers will be entitled to redundancy.

The potential job losses capped a miserable few days for the firm after last week’s decision to close Fraser Eagle Cars, off Whalley Road, Great Harwood, because of a slump in vehicle sales.

Mr Dean said: “At a time when other recognised consumer brands in the transport and logistics sector have been forced to make difficult decisions, it has become clear that our company is not immune from the prevailing economic climate.

“We are proud of our Lancashire roots and have been operating in the area for over 90 years.

"We certainly don’t intend to stop now, but have had to announce these temporary lay offs to ensure the future of the company.

“We are extremely sympathetic to all those affected, and are working hard on an initiative to reinstate the posts that have been temporarily laid off or create new ones where possible.”

Padiham Labour councillor Frank Cant said any job losses would be a body blow for the local economy.

He said: “We just hope the company can find work and this move is only a temporary measure.

“There are real issues at the moment concerning Padiham’s economy and issues like this are a real concern.”