Press Report : LDV’s future back in jeopardy after rescue bid is called off
Birmingham Post, 2nd June, 2009
The future of Birmingham van maker LDV Group Limited and thousands of jobs were thrown into doubt again today when a last-ditch rescue of the firm was called off.
Malaysian giant Weststar announced last month that it had entered into an agreement with LDV’s owner, GAZ Group, to acquire its entire interest in the Washwood Heath-based firm, which employs 850 workers, with many more dependent on the business.
LDV halted production in mid-December after a huge slump in demand for vans but withdrew an application for administration after the deal was announced, with the help of a £5 million Government bridging loan. However, it was revealed today that Weststar had decided not to go ahead with the deal after being unable to raise funds.
LDV said it had been forced to reapply for administration after essential funds to maintain the business and workforce as a going concern had not being made available. The surprise move dismayed unions and business leaders and led to workers being sent home from the factory.
LDV said: “The Directors of LDV Group have been forced to reapply for administration to protect the assets of the business. This is due to the fact that essential funds required to maintain the business and workforce as a going concern are not being made available.”
A spokesman for the Birmingham Chamber of Commerce said: “We are gravely disappointed at this news. We just hope that something can be retrieved. LDV has been down this route many times before and we hope it can bounce back again.”
Today I’ll be corralling LDV management, Unite, Weststar, the Business and Enterprise Department, Advantage West Midlands and the Administrator to work out next steps. The bottom line is LDV has a great product – and it’s worth backing. I will be continuing these talks in the next 48 hours and I will meet with senior representatives from Weststar when they visit the UK next week.” Liam Byrne, Labour MP for Birmingham Hodge Hill
Liam Byrne, Labour MP for Birmingham Hodge Hill, said: “I’m disappointed that, despite our hard-fought Government bridging loan, Weststar hasn’t yet got the finance in place to seal the deal. Administration is a setback, but I’m absolutely clear that this is by no means the end of the story. Weststar told me this morning that they are still keen on doing a deal, so our fight for LDV’s future goes on.
“Today I’ll be corralling LDV management, Unite, Weststar, the Business and Enterprise Department, Advantage West Midlands and the Administrator to work out next steps. The bottom line is LDV has a great product – and it’s worth backing. I will be continuing these talks in the next 48 hours and I will meet with senior representatives from Weststar when they visit the UK next week.”
Business Minister Ian Pearson said: “We are disappointed with the news that, despite the bridging facility made available by the Government, Weststar of Malaysia has been unable to proceed with its purchase of LDV. We gave LDV a breathing space, a bridge to the future, but in the event, unfortunately, Weststar was unable to cross that bridge. This is clearly a worrying time for the workforce and we are ready to offer support to the workers through Advantage West Midlands and the Job Centre Rapid Response Team.”
Joe Morgan, Regional Secretary of the GMB Union, said: “This is really bad, unexpected news. GMB will be seeking immediate talks with the management of LDV, with the Government and with Weststar to see what the options for the future are. We are firmly of the view that the UK Government cannot stand aside and let these manufacturing jobs go to the wall.”
Labour MP Lindsay Hoyle (Chorley), a member of the Business Select Committee, said the Government should now intervene urgently to help save LDV. He said: “This is obviously a deeply worrying development, not only in the West Midlands but in other parts of the country, including Chorley, which have links to the business.
“We need a more hands-on approach from the Government to make sure that deals like this are successful. We have seen the experience in Germany where direct dealings over General Motors are saving jobs.”
Weststar had said it hoped to restart production by July and announced expansion plans.
[Source: Birmingham Post]