Government Could Step In To Save LDV
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The government has kept the van producers LDV waiting whilst it deliberates on whether to give a £5million bridging loan that would then mean external investors could buy into the company and hundreds of jobs could potentially be saved.
Although LDV and Citroen van leasing have been on the up recently, production at LDV has been put on hold since December last year as a result of reduced demand in the new van market. Staff there have also agreed to a pay reduction of 10% recently and have even cur their week to 3-day work in efforts to bring costs under control at the site. They originally asked the government for around £30million in funding to remain buoyant. This was turned down by the government but as the situation at LDV has got worse, they have reduced their request.
Around 800 jobs at LDV could be saved and more than 6,000 people along the supply chain could also be secured if the loan is given. It has been reported that a few overseas investors have shown an interest in backing the firm if the government stumps up the money. These include one of the bidders who previously failed to secure Jaguar Land Rover, but also Mahindra and Mahindra, an Indian group who were in the running to purchase JLR and also a van leasing company a year ago but was eventually beaten by rival Asian conglomerate Tata.
Copies of the company accounts and business plans have been sent to the government and include a new concept for an ecological ‘green’ van. The government will be studying all the relevant details closely but the people in charge at LDV are hopeful. The chairman of LDV’s Russian owner Gaz, Erik Eberhardson has announced that he is certain the firm can regain its strength and an LDV spokesman echoed this when he stated “This isn’t dead in the water. BERR has agreed to investigate all options, and the MBO team believe they have the best plan.”
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