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LDV told 'no more government aid' | LDV told 'no more government aid' |
(1 day later) | |
The government has told ailing van maker LDV that the taxpayer cannot be expected to bail out the firm, after it asked for £30m in loans. | The government has told ailing van maker LDV that the taxpayer cannot be expected to bail out the firm, after it asked for £30m in loans. |
The firm has asked the government for a bridging loan because it is "literally running out of cash". | The firm has asked the government for a bridging loan because it is "literally running out of cash". |
LDV admitted that it has made a loss for four years. Sales have fallen after it suspended production in December. | LDV admitted that it has made a loss for four years. Sales have fallen after it suspended production in December. |
Russian parent firm Gaz said without funding thousands of jobs were at risk, including 900 in Birmingham. | Russian parent firm Gaz said without funding thousands of jobs were at risk, including 900 in Birmingham. |
"The British taxpayer cannot be expected to pay for the company's losses," said a spokesman for Gordon Brown. | "The British taxpayer cannot be expected to pay for the company's losses," said a spokesman for Gordon Brown. |
The spokesperson confirmed that talks with the firm were "ongoing and regular" and being conducted by Business Minister Ian Pearson. | The spokesperson 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 a management buy-out of the firm, says the situation is critical. | Erik Eberhardson, who is the outgoing Gaz chairman and hopes to lead a management buy-out of the firm, 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 & Southampton) 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 |
The joint leader of the Unite union, Tony Woodley, said the auto industry was on the brink. | The joint leader of the Unite union, Tony Woodley, said the auto industry was on the brink. |
"We've had a crisis that now could turn into a catastrophe," he said. | "We've had a crisis that now could turn into a catastrophe," he said. |
"That's why the government has got to do an awful lot more than it's even been trying to do." | "That's why the government has got to do an awful lot more than it's even been trying to do." |
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 class="" href="/1/hi/uk/7906511.stm">Workers hear of woe 'on the telly' | |
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. |
Do you work for LDV? What is your reaction to this news? Send your comment to the BBC using the form below: | Do you work for LDV? What is your reaction to this news? Send your comment to the BBC using the form below: |
In most cases a selection of your comments will be published, displaying your name and location unless you state otherwise in the box below. | In most cases a selection of your comments will be published, displaying your name and location unless you state otherwise in the box below. |