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 to tide it over as it presses ahead with plans for a management buy-out.
The firm, which employs 900 people in Birmingham, has seen sales fall after suspending production in December.
The firm, which employs 900 people in Birmingham, has seen sales fall after suspending 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 "literally running out of cash", and unable to cover its costs, putting thousands of supplier jobs at risk.
We are almost ready to go, but we need the government to do its bit Erik Eberhardson, who hopes to lead the management LDV buy-out.
We are almost ready to go, but we need the government to do its bit Erik Eberhardson, who hopes to lead the management LDV buy-out.
Erik Eberhardson, who is the outgoing Gaz chairman, hopes to lead the management buy-out.
Erik Eberhardson, who is the outgoing Gaz chairman, hopes to lead the management buy-out.
"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.
"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.
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.
LDV HISTORY Part of state-owned British Leyland in the 1970sBought by Dutch firm DAF in 1987Becomes independent firm LDV in 1993 after a management buyout2005 - bought by private equity group Sun Capital2006 - purchased by Russian company GAZ
LDV HISTORY Part of state-owned British Leyland in the 1970sBought by Dutch firm DAF in 1987Becomes independent firm LDV in 1993 after a management buyout2005 - bought by private equity group Sun Capital2006 - purchased by Russian company GAZ
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 Shadow Chancellor, George Osborne, said the government should not intervene to bail-out the van-maker.
But 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.
Sign of faith'
Sign of faith'
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.
So far the government has 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.
So far the government has 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.
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