F&I Management & Training

Remaining staff at struggling van maker LDV have been sent home, after the firm applied to enter administration. About 800 people are employed at its Birmingham factory - though most have not been working, with production halted since December last year. Employees have been paid up to the end of last week, it said, but the firm could not confirm any further payments. LDV said it 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 dealerships, and LDV estimates that "several thousand" staff are employed by its suppliers. The company is still working with a Malaysian investor, Westar, which LDV says wants to keep production in Birmingham. But it is thought unlikely to be able to do a deal before next week's deadline. The leader of the Unite union, Tony Woodley, called on the government to give LDV £4m in emergency aid to stave off the immediate threat of administration and give it time to reach an agreement with Westar. "With so many skilled jobs at risk and with a genuine possibility of a buyer, if this company goes to the wall for the want of a relatively small amount money, then it would be criminal," Mr Woodley said. 'Exceptional conditions' The firm has suffered from the broader decline in demand for commercial vehicles in the UK with registration of new LDV vans 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. LDV said that it had been relying on the goodwill of suppliers to stay afloat, but that "the actions of a small number of suppliers" had caused the firm's position to reach a point where it had "no alternative" other than to apply for administration. "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. 'Worrying development' 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 the buy-out, and a bridging loan enable it to secure funding from the European Investment Bank. Asked about the situation in the House of Commons, Prime Minister Gordon Brown said: "We have tried to be of help to them." "We have said that there is a range of government support available if they have a business model for moving forward that we can work with and be able to support." But he reiterated that the responsibility for ensuring the firm was on a sound financial footing lay with its Russian owner Gaz and potential investors. 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.

DATED: 30.04.09

FEED: AW