LDV the Birmingham van manufacturer have had their request turned down by the Government for a short term business loan. The plant is said to be running out of cash and could be close to collapse within days if they don’t receive funding.
The company had requested a short term Government backed bridging loan of between £20 and £30 million, to convert the company into the UK’s first volume manufacturer of greener electric vans.
A similar request for Government support by the Indian Tata Group who own Jaguar Land Rover was also turned down at the end of last year.
The Government has stated that it is up to the Parent company GAZ to take responsibility for funding LDV’s losses and securing the companies future, not the British taxpayers.
The Russian parent firm GAZ who own LDV have also fallen on tough times with a giant slump for demand in the Russian automotive market and a drop of 78% in revenue.
A downturn in both the UK and Global commercial van market has meant a huge 50% slump in van sales leading to LDV making a loss of £28 million last year. The GAZ group who bought LDV 3 years ago are no longer prepared to fund the company and are paving the way for a management buyout.
It’s looking increasingly unlikely the buyout will happen without the backing of the Government who have previously given LDV a loan of £24 million which had not yet been repaid.
The future of the Birmingham plant looks extremely bleak, with production being suspended in December of last year money is fast running out. If the plant was to shut down it could result in a loss of up to 6000 jobs, 800 at the Birmingham plant, 1,200 jobs at dealer networks and a further 4,000 jobs throughout the suppliers industry.