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LDV sends staff home as end nears Administration deadline for LDV
(30 minutes later)
Staff at struggling van maker LDV have been sent home from work, after the firm applied to enter administration. Remaining staff at struggling van maker LDV have been sent home, after the firm applied to enter administration.
Birmingham-based LDV employs about 800 people in its factory - though most have been on reduced hours during 2009 or not working at all.
Employees have been paid up to the end of last week, it said, but the firm could not confirm any further payments.Employees have been paid up to the end of last week, it said, but the firm could not confirm any further payments.
Birmingham-based LDV employs about 800 people in its factory - though most have been on reduced hours during 2009. LDV said it would continue to look for funding until 6 May when it is due to formally go into administration
Chief executive Evgeniy Vereshchagin said LDV would continue to look for funding until 6 May when it is due to formally go into administration There are about 1,200 people employed in LDV dealerships, with it estimating "several thousand" people are employed by its suppliers.
There are also about 1,200 people employed in dealerships, with LDV estimating "several thousand" people are employed by its suppliers.
'Exceptional conditions''Exceptional conditions'
LDV has been holding discussions with UK government ministers over possible government support for a management buy-out and a bridging loan enable it to secure funding from the European Investment Bank. The firm has suffered from the broader decline in demand for commercial vehicles in the UK.
Registration of new LDV vans was down by 73% in March from a year previously, according to the SMMT.
However it has had long-running problems and has made a loss for the last four years.
It said that it had been relying on the goodwill of suppliers to stay afloat, but that it had run out of money.It said that it had been relying on the goodwill of suppliers to stay afloat, but that it had run out of money.
"During the past few weeks, the global economic crisis has forced us to operate in exceptional conditions and we cannot continue in this position without funding indefinitely," Mr Vereshchagin said in a letter to staff. "During the past few weeks, the global economic crisis has forced us to operate in exceptional conditions and we cannot continue in this position without funding indefinitely," chief executive Evgeniy Vereshchagin said in a letter to staff.
Malaysian investor, Westar, had been interested in the company - but LDV said it was now unlikely to invest. 'Worrying'
Plans for the future of the business have included a management buy-out, with proposals to begin making electric vans from the end of the year.
The firm has held talks with UK government ministers over possible government support for a buy-out and a bridging loan enable it to secure funding from the European Investment Bank.
But ministers suggested that the firm focused on getting more finance from its Russian-owner, Gaz, or from elsewhere.
"This is clearly a worrying development for the company and its employees. We are monitoring the situation closely," a spokesman for the business department, BERR, said.
"We have made it clear to potential investors that, once the company is on a sound footing, it would be eligible to apply for a range of government support, but the first responsibility for putting the company on a sound footing rests with the current owner and a potential investor."
Malaysian investor, Westar, had been interested in the company - but it is now thought unlikely to invest.
Last month, Erik Eberhardson, the chairman of LDV's Russian owner Gaz, said he believed that LDV could be saved and that a management buyout was the best option.Last month, Erik Eberhardson, the chairman of LDV's Russian owner Gaz, said he believed that LDV could be saved and that a management buyout was the best option.
The cancellation of the 2010 British International motor show and a record drop in UK car production are the latest signs of trouble for a sector that has experienced tough times for months.The cancellation of the 2010 British International motor show and a record drop in UK car production are the latest signs of trouble for a sector that has experienced tough times for months.
Do you work for LDV? How have you been affected by the firm's problems? Send us your comments and experiences using the form below.Do you work for LDV? How have you been affected by the firm's problems? Send us your comments and experiences using the form below.
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