Weststar, the Malaysian group that made a failed rescue bid for LDV, the vanmaker, last month, has emerged as one of three potential buyers of the Birmingham-based company, which was placed in administration yesterday.
News of Weststar’s continued interest in LDV, which is owned by Gaz, of Russia, came too late for most of the 850 workers, however, who are being made redundant. A skeleton workforce of 40 will be retained to maintain the site. An LDV spokesman said that a further 1,200 jobs were at risk in dealership and distribution, while an estimated 4,000 jobs with parts suppliers could also be lost.
Gaz, which is controlled by Oleg Deripaska, the Russian oligarch, called it a sad day for the LDV workforce and for British manufacturing.
Tony Woodley, general secretary of Unite, the union, said that the job losses represented “a bitter blow” for manufacturing and the West Midlands region, in particular. He said that yesterday’s “sad” announcement was not because of a lack of effort by Unite or the Government to try to find solutions.
Hopes for a last-ditch rescue of the company were dashed after Weststar, a vehicle distributor, failed to raise funds, but Rob Hunt, joint administrator and partner at PricewaterhouseCoopers (PWC) in Birmingham, said that Weststar was among three parties wishing to engage in talks with PwC over LDV. “We will try to ensure that a solution is found to provide a structure to take the business forward,” he said.
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There has been speculation that Weststar may table a new offer this week for LDV’s best assets. Mr Hunt said that his priority would be to find a purchaser for all LDV’s assets. He expected to begin talks with Weststar and other interested parties over the coming days, but he did not expect clarity in negotiations much before the end of June.
The Government had already provided Weststar with a £5 million bridging loan, but it rejected the company’s plea for between £45 million and £50 million more.
LDV has been fighting for survival since December, when it ceased production. It is thought to have run down its inventory to only 500 vehicles. Sales of commercial vehicles fell by 34 per cent in the year to May, according to the Society of Motor Manufacturers and Traders. The society said that “it will take a little while for improving confidence to register in the market place for vans”.
Gaz, which bought LDV three years ago, had hoped that the purchase would allow it to make a version of LDV’s Maxus van for the Russian market, but its plans were hit by the collapse in new vehicle sales. The company said that it had pursued a management buyout, approached numerous foreign investors, held extensive talks with the Government in an attempt to secure bridging finance and had attempted to secure a European Investment Bank loan.
“We have done everything we can to secure LDV’s future in Birmingham, but, unfortunately, time has run out,” Gaz said. An LDV spokesman said that it appeared to be “the end of the line” for GAZ’s involvement, but he added: “You can’t rule out Weststar coming in [again] and keeping it [the plant] in Birmingham or other investors coming in and keeping it there, or, the worst of possible outcomes, taking the assets abroad.”