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LDV wants Government money for MBO

Russian-owned van manufacturer LDV is to have emergency talks with Lord Mandelson today in order to secure a £40 million lifeline to fund a management buy-out of the business.

GAZ, LDV’s parent company has seen LDV sales almost halve in the last three months causing its UK plant to shut down production since December 12.

It is thought that about 6,000 jobs would be lost if LDV collapses, with about 900 employed directly at the plant, 1,200 in the dealership network and 4,000 in the supply chain.

A spokesman for LDV confirmed that talks with the Government were expected today.

He said: “We have been requesting urgent help. It is critical in days and weeks that there is action to preserve jobs and the manufacturing base.”

He said that LDV had invested heavily in environmentally friendly technology and that the investment should be preserved.

The MBO is being led by by outgoing GAZ chairman and Volvo managing director Erik Eberhardson, who plans to make LDV the first volume producer of electric vans in the UK. 

Eberhardson said plans are at an advanced stage, with prototypes of low-carbon/green vans already trialing with a number of companies.

He said: "LDV can be a symbol of the low carbon, green manufacturing future that the government says it wants Britain to lead.

"We are almost ready to go, but we need the Government to do its bit. I am confident they understand the potential to secure this green technology in Britain - and the need to move very quickly.”

GAZ still funding LDV

It has been said that GAZ has cut finance to LDV as it struggles with problems in the Russian market. However, LDV has said that it is still receiving money from GAZ.

Tony Woodley, Unite’s joint general secretary, said: “What is the point of having £1.1 billion of government money for the car industry if it is not used to help protect jobs under immediate threat?

“We have given billions to the banks and have so far achieved nothing with that. It is the economics of madness not to help good manufacturers.”

LDV was bought by Deripaska in 2006 for approximately £50 million when it was on the brink of collapse. Since then £25 million has been invested in the business.

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