Morning:
8°c
Nearly all the 850 staff at vanmaker LDV were sacked tonight.
The company whose rescue by Malaysian distributor Weststar collapsed last week plunged into administration this morning, leading to fears for the workforce and the thousands of people employed at firms supplying the business.
Those worries proved sadly well-founded this evening when the administrators at PricewaterhouseCoopers confirmed they would be swinging the axe.
“Sadly, we do not have the funding necessary to keep employees on, so… we will have to make redundant later today the vast majority of the workforce,” said joint administrator Rob Hunt.
Not only is this a blow to Britain's beleaguered engineering sector but it is also an embarrassment for the Government which had been attempting to broke a rescue.
LDV, known historically as Leyland Daf Vans, was owned by Russian tycoon Oleg Deripaska's GAZ investment firm.
Its demise is humiliating for Business Secretary Lord Mandelson, who has just been promoted to the new position of First Secretary of State and is a friend of Deripaska.
Mandelson's department sanctioned a £5 million bridging loan to LDV to ease the Weststar takeover but the offer came to nothing after the Malaysian firm failed to secure financing for its deal.
Guy Jones, LDV's marketing manager, said: “The management team have worked exceptionally hard over the past few weeks and months but they've been unable to obtain the required funding from the banking system.”
LDV's collapse came just as managers from Magna International — General Motors Europe's likely new owner — were preparing to visit GM's Vauxhall plants at Luton and Ellesmere Port tomorrow where workers are also in fear of their jobs.
A delegation from the Canadian buyer will go to its factories before heading into meetings with unions.
Some estimates put the cost of LDV's collapse to the taxpayer of up to £53 million in unemployment benefits and lost taxes in the first year.
A GAZ spokesman said: “This is a sad day for the LDV workforce, suppliers and British manufacturing.”
Reader views (2)
and this is all because the MOD decided that in the interests of eu integration and tony blairs backing for a european intervention force, a multi billion pound order for army trucks went to austria(MANN)instead of a US/LDV bid for the contract. UK tax money supporting Austrian jobs wonderful but not surprising I suppose.
- Dick, redhill, 08/06/2009 22:13
Report abuse
There is a strategic importance in protecting the remaining British motor industry. The government is paralytic. Do something!
- Geoff, Melbourne, Australia, 08/06/2009 12:20
Report abuse
