Press Report : LDV makes last-ditch plea for help
Birmingham Post, 5th June, 2009
Managers at van maker LDV have issued a last-ditch plea to the Government to help rescue the company or see thousands of jobs axed at a huge cost to the economy. The Birmingham-based business is set to apply for administration on Monday after a rescue deal collapsed when Malaysian firm Weststar said it couldn’t raise enough funds to take over LDV.
The management team warned that administration could lead to the end of all van production in the UK because of uncertainty over other companies. Managers said they were making a “final call” to the Government to avoid closure, adding that a loan of £60 million would help refinance the firm and help turn it into a profitable business, building MAXUS vans.
“The cost of supporting LDV is small compared with standing back and letting it fail,” managers said in a statement. “The cost to the Treasury alone will be up to £53 million in unemployment benefits and lost taxes in the first year, with the certainty in this environment of long-term unemployment to follow.
Around 4,000 British jobs are at risk with over 1,000 in the Midlands region and many around Washwood Heath, which is already one of the highest unemployment areas in the country. In addition to the losses to the Government, the economy loses over £200 million of wages, purchases and export revenue.”
“Around 4,000 British jobs are at risk with over 1,000 in the Midlands region and many around Washwood Heath, which is already one of the highest unemployment areas in the country. In addition to the losses to the Government, the economy loses over £200 million of wages, purchases and export revenue.”
Guy Jones, LDV’s Marketing Director, said: “The two key drivers in the current light commercial vehicle market are to reduce cost and to reduce CO2. The MAXUS product is better suited than many of its major competitors to take advantage of these trends. There has been over £600 million invested in the past few years in lightweight, fuel-efficient products with a low cost of ownership and the Electric MAXUS is now ready for production. It would be a tragedy if the UK threw away the opportunity of the return on this investment”.
Managers said they had restructured the business, eliminating the major loss-making areas of previous years, reducing fixed overheads and labour costs. LDV, owned by Russian giant GAZ Group, has not built any vans since mid-December after a slump in demand for vans.
[Source: Birmingham Post]