LDV future depends on government cash

Van maker LDV's future depends on the Government stepping in with money to bail it out, union leaders said today.

Thousands of jobs are now at risk as it again faces closure.

Malaysian group Weststar said it was pulling out of its takeover of the Birmingham firm after being unable to get support from banks or lenders for the deal. Weststar said that despite substantial efforts and a significant planned investment of its own funds, it had been unable to secure the remaining investment required to re-finance the business.

This was due to the global financial crisis, compounded by recent adverse developments in the UK motor manufacturing industry, it said.

"Weststar has explored all known avenues to access this funding, including assistance from the UK government, but without this in place, it is not possible to deliver the plan," it added.

As a result, the Goverment stopped a £5 million bridging loan that kept LDV going, forcing the firm to go back to court to reapply for administration yesterday.

About 50 workers called back to the plant to prepare for production in July were sent home yesterday. Around 850 people work at LDV but have not produced a van since Christmas.

Thousands more work at its sales network and at component supplier firms.

Unite union national officer Dave Osborne said: "The failure of Weststar to secure financial support from the banks for its takeover of the van manufacturer puts thousands of jobs across the Midlands at risk again. We understand that Weststar is now looking to the Government to help underwrite its application to the banks for finance.

"We urge the Government, through Berr (the Department for Business), to support this application and do all that it can to help Weststar complete its purchase quickly so that a future can be secured for this plant and its workforce."

Joe Morgan, GMB union regional secretary, said the Government should not "stand aside and let these manufacturing jobs go to the wall."

Liam Byrne, Labour MP for Birmingham Hodge Hill, said he would try to get LDV management, Unite, Weststar, the Business and Enterprise Department, Advantage West Midlands and the administrator to work out next steps.