Press Report : LDV future still in doubt
Graeme Brown, Birmingham Post, 7th May, 2009
Workers at van-maker LDV remain in the dark about their futures despite a last-minute £5 million loan from the Government.
A court hearing originally expected to place the Washwood Heath firm into administration was adjourned for a week after the Judge was told Russian owners GAZ Group had agreed in principle to sell its entire shareholding in LDV to Malaysian giant Weststar. However, talks to complete the takeover are on-going and Weststar still needs to raise cash from investors, which means 850 directly-employed staff and thousands more in the supply chain remain in limbo.
LDV spokesman Guy Jones said the proposed deal would secure “as many jobs as possible” but he warned there was no guarantee all would be saved. He said: “We hope with the launch of exciting products we will be able to create new jobs. What I can confirm at the moment is that this deal will secure production here in Birmingham at this site, securing as many jobs as possible but clearly the marketplace and the economy is going to determine exactly how many people are required to build vehicles and assemble them.”
LDV’s factory has been at a standstill since before Christmas, after the firm ran out of cash, and there had been growing fears about its future after directors applied to put the company into administration last week. It yesterday applied for the Administration Proceedings to be put back for about two weeks but the Judge adjourned the case until Wednesday at Birmingham County Court.
What I can confirm at the moment is that this deal will secure production here in Birmingham at this site, securing as many jobs as possible but clearly the marketplace and the economy is going to determine exactly how many people are required to build vehicles and assemble them.” LDV’s Guy Jones.
Weststar, which already has a joint operation with LDV to import Maxus van kits, completed negotiations with GAZ Group over the weekend but received a major boost when it emerged a government loan was agreed. The loan will cover LDV’s running costs of about £1.2 million a week until the deal can be finalised.
However, LDV said in a statement: “Whilst a sale has been agreed, it will take another few weeks to be completed and the loan from the Government is to enable the business to continue operating whilst this process takes place. We need continued support from our employees, dealers and suppliers over this period to finalise this process and restart production and sales of MAXUS commercial vehicles. This is clearly a significant development for LDV and a major step towards an exciting new future but there are still major steps to be competed over the next few weeks.”
Birmingham Chamber of Commerce and Industry Chief Executive Jerry Blackett is seeking clarification from Weststar about plans for the Washwood Heath plant and the workforce. He said: “As well as safeguarding as many jobs at the plant as possible, there are 63 businesses in the West Midlands alone who rely to varying degrees on work from Washwood Heath.
“Clearly many issues surrounding the Weststar takeover need to be clarified, not the least of which is the future of the plant itself. We will also hope that if production re-starts it will be in time to take advantage of the Government’s ‘scrappage’ scheme which applies to vans as well as cars.”
[Source: Birmingham Post]