Press Report : LDV suppliers and dealers told warranties won’t be honoured

Jon Griffin, Birmingham Post, 26th June, 2009

A new LDV crisis has been signalled after more than 230 dealers and suppliers owed millions of pounds by the Birmingham factory were told no warranties would be honoured. Businesses across the UK, the majority of them totally reliant on the vanmaker, face a grim battle for survival with some individual debts of tens of thousands of pounds.

About 1,270 jobs were already at risk but their prospects worsened after Administrators PwC said warranty repairs would not be recompensed, including work on vehicles sold before the vanmaker’s £75 million collapse in early June. The scale of the fall-out from the crash of one of the Midlands best-known industrial names became clear as businesses the length and breadth of the UK fight to keep their heads above water.

The LDV Dealers’ Association revealed that unpaid debts from the stricken company run into millions, with job losses on the cards to add to the 810 already made redundant at the factory. The PwC move marks a major body blow to many small dealerships across the country who have continued to undertake warranty repairs despite receiving no payment from cash-strapped LDV as it fought in vain to find a buyer. The warranties decision will heap further financial pressure on LDV dealers and supply chain businesses who have been pinning their hopes on a rescue of the Washwood Heath factory for months since production ground to a halt before Christmas.

David Lewis, Chairman of the LDV Dealers Association, said: “UK dealers find themselves in a seriously concerning position. Having fully supported LDV and Maxus customers since financial difficulties first became apparent, individual dealers are now owed tens of thousands of pounds in unpaid debt and collectively the figure runs to millions.

UK dealers find themselves in a seriously concerning position. Having fully supported LDV and Maxus customers since financial difficulties first became apparent, individual dealers are now owed tens of thousands of pounds in unpaid debt and collectively the figure runs to millions.” David Lewis, Chairman, LDV Dealers Association

“Add to this the devaluation of the remaining Maxus vans we have in our stocks and the picture worsens. As a consequence dealers cannot rule out reorganisations and redundancies in their business. Our drive as a network has always been to support customers and dealers continued undertaking warranty repairs despite no payments from LDV.

“The Administrator wrote to dealers on June 9 advising they would not be able to honour warranties for vehicles sold before, during or after the administration. Maxus end-users effectively become unsecured creditors for any cost of repairs previously covered by the manufacturers’ warranty,” he added.

“LDV looked to be succeeding in selling the business to Weststar as a going concern which would have protected creditors in the supply chain and dealer network and employees. But this fell apart and now the best we can hope for is a successful sale from administration where a new owner will see the value in our established UK network and want to work with us to rebuild.”

A long-established network of LDV business franchises throughout the UK includes 72 new vehicle sales dealers and 164 repair, service and spare parts suppliers.

Hopes of a rescue of LDV grew this week with up to nine would-be buyers signing confidentiality agreements ahead of further due diligence, with a range of UK and overseas bidders in the frame.

[Source: Birmingham Post]

Posted in: AROnline News, LDV
Clive Goldthorp

About the Author:

Clive claims that his interest in the BMC>MG story dates back to his childhood in the 1960s when the family’s garage premises were leased to a tenant with an Austin agency. However, back in the 1920s and 1930s, his grandmother was one of the country’s first female Garage Proprietors so cars probably run in his genes! Admits to affairs with Alfa Romeos, but has more recently owned an 06/06 MG TF 135 and then a 15/64 MG3 Style… Clive, who was AROnline’s News Editor for nearly four years, stood down from that role in order to devote more time to various Motor Racing projects but still contributes articles on as regular basis as his other commitments permit.

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