LDV jobs at risk as Government turns down bridging loan request

Struggling van maker LDV has been told by the Government it will not approve its request for a bridging loan of up to £30 million.

Crisis talks between the company and the Government took place over the weekend to discuss urgent financial aid to prevent the van maker collapse.

Production at its facility in Birmingham has been put on hold since December 12 following a slump in demand.

LDV employs over 800 people in the Washwood Heath district of Birmingham and has a dealer network employing a further 1,200. The company also supports over 5,000 jobs in suppliers.

The firm said it is “literally running out of cash” but the jobs look set to be under threat as the Government told the firm it is up to parent company, Gaz, to fund the losses.

A spokesperson for Gordon Brown said “The British taxpayer cannot be expected to pay for the company’s losses.”

The Government told India’s Tata Group the same thing when it sought financial help last December for Jaguar Land Rover.

Outgoing Gaz chairman, Erik Eberhardson, is hoping to lead a management buy-out of the company with some of his own cash and a contribution from Gaz, with the total amounting to £3-£4 million.

However, the company said a bridging loan of £20-£30 million from the Government will secure its future.

The bleak news from LDV comes as staff at Jaguar Land Rover are set to vote on a one-year pay freeze and a four-day week, in return for no compulsory job losses for 2 years.

Story link: LDV jobs at risk as Government turns down bridging loan request