Struggling van-maker LDV has asked the government for up to £30m in loans to help secure its future and save jobs.
Struggling van maker LDV has asked the government for up to £30m in loans to help secure its future and save jobs.
It wants bridging loans to tide it over as it presses ahead with plans for a management buy-out.
It wants bridging loans as it presses ahead with management buy-out plans.
The firm, which employs 900 people in Birmingham, has seen sales fall after suspending production in December.
But the government says UK taxpayers cannot be expected to bail out LDV, which has made a loss for four years and suspended production in December.
Russian parent firm Gaz said LDV was "literally running out of cash", and unable to cover its costs, putting thousands of supplier jobs at risk.
Russian parent firm Gaz said LDV was running out of cash and couldn't cover its costs, putting thousands of jobs at risk, including 900 in Birmingham.
Erik Eberhardson, who is the outgoing Gaz chairman, hopes to lead the management buy-out.
A spokesman for Gordon Brown confirmed that talks with the firm were "ongoing and regular" and being conducted by Business Minister Ian Pearson.
Erik Eberhardson, who is the outgoing Gaz chairman and hopes to lead the management buy-out, says the situation is critical.
"Unfortunately since the company [LDV] is not producing, it is not making enough revenue to cover its costs and the company is literally running out of cash right as we speak," he said.
"Unfortunately since the company [LDV] is not producing, it is not making enough revenue to cover its costs and the company is literally running out of cash right as we speak," he said.
UK CAR INDUSTRY CUTS 1: Aston Martin (Gaydon) 600 jobs lost, three-day week2: Bentley (Crewe) 220 jobs lost, seven-week closure from March3: Ford (Essex, Daventry, Merseyside & Bridgend) 850 jobs lost, four-day weeks, non-production days4: GM Vauxhall (Ellesmere Port & Luton) 47,000 global job losses, four-day week5: Honda (Swindon) Production halted until June6: Jaguar Land Rover (Solihull & Halewood) 1,050 jobs lost plus production cuts7: BMW Mini (Swindon & Cowley) 850 jobs lost, week-long stoppages planned8: Nissan (Sunderland) 1,200 jobs lost, some shifts stopped9: Rolls-Royce (West Sussex) 40 jobs lost plus non-production days10: Toyota (Burnaston & Deeside) Some night shifts stopped, non-production weeks planned11: LDV (Birmingham) 95 jobs lost, production suspended since December Source: SMMT & BBC
UK CAR INDUSTRY CUTS 1: Aston Martin (Gaydon) 600 jobs lost, three-day week2: Bentley (Crewe) 220 jobs lost, seven-week closure from March3: Ford (Essex, Daventry, Merseyside & Bridgend) 850 jobs lost, four-day weeks, non-production days4: GM Vauxhall (Ellesmere Port & Luton) 47,000 global job losses, four-day week5: Honda (Swindon) Production halted until June6: Jaguar Land Rover (Solihull & Halewood) 1,050 jobs lost plus production cuts7: BMW Mini (Swindon & Cowley) 850 jobs lost, week-long stoppages planned8: Nissan (Sunderland) 1,200 jobs lost, some shifts stopped9: Rolls-Royce (West Sussex) 40 jobs lost plus non-production days10: Toyota (Burnaston & Deeside) Some night shifts stopped, non-production weeks planned11: LDV (Birmingham) 95 jobs lost, production suspended since December Source: SMMT & BBC
"It's 850 jobs in the plant, 1,200 jobs in the dealer network and about 4,000 jobs in the supplier industry which are at risk".
"It's 850 jobs in the plant, 1,200 jobs in the dealer network and about 4,000 jobs in the supplier industry which are at risk".
He added: "We need £20-30m, depending on how we structure it," he added.
He added: "We need £20-30m, depending on how we structure it," he added.
Staff worries
Staff worries
Staff at LDV, which has already sent a number of workers home in recent weeks, said the picture at the firm was bleak.
Staff at LDV, which has already sent a number of workers home in recent weeks, said the picture at the firm was bleak.
John McLoughlin, said he had lost his job after working for the company for 33 years.
John McLoughlin, said he had lost his job after working for the company for 33 years.
"I don't know where to go from here," he said.
"I don't know where to go from here," he said.
"Luckily enough for me, today the wife has started a new job, so we've got some money coming in. It's not enough to pay the mortgage though."
"Luckily enough for me, today the wife has started a new job, so we've got some money coming in. It's not enough to pay the mortgage though."
His comments came as it was announced that staff at Jaguar Land Rover are to be balloted over whether to accept a pay freeze and four-day week in order to avoid compulsory redundancies.
His comments came as it was announced that staff at Jaguar Land Rover are to be balloted over whether to accept a pay freeze and four-day week in order to avoid compulsory redundancies.
Ultimate decision
Ultimate decision
Gaz is controlled by oligarch Oleg Deripaska, a friend of Business Secretary Lord Mandelson.
Gaz is controlled by oligarch Oleg Deripaska, a friend of Business Secretary Lord Mandelson.
BBC business correspondent Martin Shankleman said the request for state help could cause Lord Mandelson political difficulties, after he was entertained by Mr Deripaska on his yacht over the summer.
BBC business correspondent Martin Shankleman said the request for state help could cause Lord Mandelson political difficulties, after he was entertained by Mr Deripaska on his yacht over the summer.
But the shadow chancellor, George Osborne, said the government should not intervene to bail-out the van-maker.
But the shadow chancellor, George Osborne, said the government should not intervene to bail-out the van-maker.
Instead, ministers should establish a national loan guarantee scheme to help firms facing such difficulties, Mr Osbourne said.
Instead, ministers should establish a national loan guarantee scheme to help firms facing such difficulties, Mr Osbourne said.
Whitehall sources have told the BBC that any talks with the van firm would be conducted by junior ministers and officials at the Department for Business, Enterprise and Regulatory Reform.
Whitehall sources have told the BBC that any talks with the van firm would be conducted by junior ministers and officials at the Department for Business, Enterprise and Regulatory Reform.
But it is understood that ultimate responsibility over any scheme would still rest with Lord Mandelson.
But it is understood that ultimate responsibility over any scheme would still rest with Lord Mandelson.
Prime Minister Gordon Brown said the government had adopted measures to help firms, whatever their size.
Prime Minister Gordon Brown said the government had adopted measures to help firms, whatever their size.
He said steps included giving loans to small businesses, providing medium firms with working capital and larger firms with a facility from the Bank of England.
He said steps included giving loans to small businesses, providing medium firms with working capital and larger firms with a facility from the Bank of England.
The government has already announced measures to support the car industry including guarantees to unlock loans of up to £1.3bn from the European Investment Bank, as well as a further £1bn in UK government loans, to fund investment in greener vehicles.
The government has already announced measures to support the car industry including guarantees to unlock loans of up to £1.3bn from the European Investment Bank, as well as a further £1bn in UK government loans, to fund investment in greener vehicles.
'Sign of faith'
'Sign of faith'
LDV HISTORY Part of state-owned British Leyland (pictured) in the 1970sBought by Dutch firm DAF in 1987Became independent firm LDV in 1993 after a management buy-out2005 - bought by private equity group Sun Capital2006 - purchased by Russian company GAZ
LDV HISTORY Part of state-owned British Leyland (pictured) in the 1970sBought by Dutch firm DAF in 1987Became independent firm LDV in 1993 after a management buy-out2005 - bought by private equity group Sun Capital2006 - purchased by Russian company GAZ
The management buy-out of the firm aims to make it into the first big producer of electric vans in the UK.
The management buy-out of the firm aims to make it into the first big producer of electric vans in the UK.
"We are almost ready to go, but we need the government to do its bit," added Mr Eberhardson.
"We are almost ready to go, but we need the government to do its bit," added Mr Eberhardson.
"I am confident they understand the potential to secure this exciting green technology in Britain - and the need to move very quickly."
"I am confident they understand the potential to secure this exciting green technology in Britain - and the need to move very quickly."
A company spokesman added: "Short-term bridging support for this management buy-out from the government will secure its future and the future of hundreds of jobs."
A company spokesman added: "Short-term bridging support for this management buy-out from the government will secure its future and the future of hundreds of jobs."
Liam Byrne, Labour MP for Birmingham Hodge Hill, said: "LDV's plans for a management buy-out are an excellent sign of faith by the... leaders in the company.
Liam Byrne, Labour MP for Birmingham Hodge Hill, said: "LDV's plans for a management buy-out are an excellent sign of faith by the... leaders in the company.
"For some weeks now I have been working closely with the company as they have shaped their ambitious plans for winning a big share of the 'green van' market."
"For some weeks now I have been working closely with the company as they have shaped their ambitious plans for winning a big share of the 'green van' market."
LDV was bought by the Gaz group two years ago.
LDV was bought by the Gaz group two years ago.
In November it announced 95 jobs were to be axed at its Washwood Heath factory in Birmingham.
In November it announced 95 jobs were to be axed at its Washwood Heath factory in Birmingham.
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