Government says No to ailing van maker LDV
LDV asks for bridging loan as it runs out of money
The government has told van maker LDV that the taxpayer cannot be expected to pay for the company’s losses. LDV has made a loss for the last four years and sales have fallen after production was suspended in December.
The company needs between twenty and thirty million, it is not making enough revenue as it is not producing. There are 850 jobs at the plant, 1200 jobs in dealer network and approximately 4000 jobs in the supplier industry, all now are at risk.
The Shadow Chancellor Mr George Osborne said the government should not intervene to bail-out the van-maker, he says ministers should establish a national loan guarantee scheme to help firms facing such difficulties. The ultimate responsibility with regard to any scheme lies with Lord Mandelson.
The manufacturer is owned by Russian car-making giant GAZ. They have pumped millions into the plant over the last few years, but are understood to be reluctant to continue supporting the company. Erik Eberhardson, who is the outgoing Gaz chairman hopes to lead a management buy-out of the firm, he says the situation is now critical.