A victim of Germany's economic ills, Grundig radios the receivers

Grundig, one of the architects of Germany's post-war reconstruction, yesterday became the country's latest high-profile business failure after being forced to file for insolvency with estimated debts of €150m (£95m).

Once Europe's biggest radio manufacturers, Grundig finally collapsed after rescue talks with two overseas buyers failed to secure the company's future.

In a statement issued from its Nuremberg headquarters, Grundig said that it had the support of its banks to continue operations whilst it attempted to find a buyer and save as many jobs as possible. The company employs 3,500 staff – a tenth of its workforce in the 1980s when Grundig was at the height of its success.

The decision to file for "debtor in possession" insolvency proceedings followed the collapse of talks last week for the Turkish appliance manufacturer Beko to take a majority stake in Grundig. Talks with another potential saviour, Taiwan's Sampo, failed last month.

Grundig said, however, that it was continuing "intensive negotiations with possible investors" although it refused to name them on grounds of confidentiality.

The collapse of Grundig has echoes of the demise of other well-known German corporate names such as the construction giant Philip Holzmann and the stationery group Herlitz. In Grundig's case though, it was the victim of fierce competition from Asian rivals such as Sony and Samsung which ultimately beat it on both price and quality. It also suffered from poor management and a scatter-gun approach to product development, which prompted one banker who examined the books to observe that Grundig itself did not have a clear idea of everything it made.

Grundig was founded in 1945 by Max Grundig, a radio dealer whose first product was a radio testing device. Production and sales of radios was under strict Allied control at the time.

The next year he brought out his first tubeless radio, the Heinzelmann. It went on to become a best seller and by 1966 the company had sold more than 16.5 million radios worldwide. Grundig then began branching out into a wide range of other home appliances from hi-fi equipment and television sets to video recorders, cordless telephones and in-car entertainment systems. Today it is one of Europe's biggest producers of digital television set-top boxes.

In 1984 the Dutch electronics giant Philips took an equity stake and acquired management control. In 1989 the company's eponymous founder died aged 81 and in 1997 Philips pulled out of Grundig. Three years later the businessman Anton Kathrein took over as chairman and majority shareholder.

In 2001, Grundig made a €150m loss on sales of €1.3bn and had a workforce of 5,400, of which half was in Germany and half abroad in countries such as Portugal where the company built a big manufacturing plant.

Late last year the European Commission allowed the German state of Bavaria, where Grundig is based, to back a €45m loan to keep the company in operation while its future was decided. It was forced into insolvency after creditors refused to extend €200m in credits.