LONDON (AP) — British car parts maker Wagon PLC filed for a form of bankruptcy yesterday after it failed to convince key shareholders to commit to an emergency refinancing package after a global slump in demand for cars crippled its business.

Wagon, which employs 6,300 people around the world making parts for Honda, Ford, General Motors, Land Rover and Nissan, hopes to keep some of its overseas operations running, but its collapse in Britain sends a warning about the state of the international auto industry.

Adding to the gloom, car maker Vauxhall, a subsidiary of General Motors Corp. that employs around 5,000 people in Britain, confirmed it is doubling its Christmas vacation for workers to a month to slow down production.

The British government said it held talks with car manufacturers over the weekend, saying that companies including Toyota, General Motors, Nissan and Rolls-Royce had discussed concerns over liquidity. Both Vauxhall and Jaguar Land Rover, owned by the Indian conglomerate Tata, have reportedly asked the government for financial aid.

Wagon, controlled by American billionaire Wilbur Ross, filed for administration for Wagon PLC and several British subsidiaries, which employ around 500 people.

Interim management specialist firm Zolfo Cooper has taken over the day-to-day operations of the company, which it said it plans to run as a going concern while it "explores options for its future". Zolfo Cooper added that it expected immediate "small number" of job losses at the company's head office in Birmingham, nothern England, as a result of the appointment of administrators.

The auto industry has been hard hit by the global economic slowdown — the Society of Motor Manufacturers and Traders reported a 36.8 percent year-on-year fall in new vehicle registrations in Britain last month.

"The global automotive sector is battling unprecedented market conditions, which have led to many of the major car manufacturers significantly reducing their production schedules," said Zolfo Cooper partner Alistair Beveridge. "This has had a major adverse impact on customer orders for Wagon and resulted in the liquidity crisis which has led to the appointment of administrators."

The next two years will be very critical for the parts industry said Fredinand Dudenhoffer, professor of automotive economics at the University of Gelsenkirchen.

"Suppliers will probably run into liquidity problems and they may not be able to finance their losses," said Dudenhoffer. "No bank in the world will provide financing for losses."

In the United States, Congress is still debating legislation that could dole out as much as $15 billion to automakers who have warned of the potential of a wholesale industry collapse.

In return for the money, the carmakers are likely to have to agree to terms similar to those placed on banks that receive funds under the $700 billion Wall Street bailout, including limiting their top executives' pay packages and giving the government a chunk of future gains.

Birmingham, England-based Wagon had tried to convince its banks, including Royal Bank of Scotland and Lloyds TSB, both of which are now largely controlled by the government, to commit to a 50 million-euro bailout package. The banks had already agreed loans totalling 155 million euros in the summer.

Wagon's car making clients had pledged 30 million euros for the new funding package, while Ross was reportedly preparing to commit 10 million euros by purchasing one of its subsidiaries.

Share trading in the company, which also makes shock absorbers for non-automotive clients including elevator makers Otis and Schindler, has been suspended since October, when the company reported a "steep deterioration" in the European car market and said it was in talks with lenders about its funding situation. The stock was trading then at just 1.25 pence ($0.02).

Wagon has its roots in Wagon Repairs, a business set up at the end of World War I to maintain railway rolling stock. It was chosen by Ross as the foundation for a European car parts business that now operates in countries including the Czech Republic, Turkey, Italy, Romania, Spain, US and China.