LDV Relying On Government Loan For Survival
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Thousands of jobs could potentially be spared at the van makers LDV if the government agree to a £5m bridging loan that would lead to further investment from overseas companies.
Although LDV and Citroen van leasing have been on the up recently, production at LDV has been put on hold since December last year as a result of reduced demand in the new van market. Staff there have also agreed to a pay reduction of 10% recently and have even cur their week to 3-day work in efforts to bring costs under control at the site. They originally asked the government for around £30million in funding to remain buoyant. This figure was turned away but since some rethinking on LDV’s part as reduced request has been put forwards.
Around 800 jobs at LDV could be saved and more than 6,000 people along the supply chain could also be secured if the loan is given. It is understood that a number of overseas investors are looking to back the firm if the government step in. These include one of the bidders who previously failed to secure Jaguar Land Rover, but also Mahindra and Mahindra, an Indian group who were in the running to purchase JLR and also a van leasing company a year ago but was eventually beaten by rival Asian conglomerate Tata.
The government have requested copies of all LDV’s accounts and business plans, including their new idea for a green ‘eco’ van. The government will be going over all the details with a fine tooth comb but those in charge remain hopeful. Erik Eberhardson, the chairman of LDV’s Russian owner Gaz, has already stated he is convinced the firm can be saved and a spokesman for LDV recently announced “This isn’t dead in the water. BERR has agreed to investigate all options, and the MBO team believe they have the best plan.”
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