As many will already know, the deal to buy LDV by Westar has fallen through. This means that on Monday, LDV faces administration and this could presage the end of all van production in the UK.
Industry experts state that there is uncertainty surrounding the future of Ford at Southampton and the future of Vauxhall at Luton now hangs in the balance following the restructure of GM Europe.
The New LDV Management Team (nearly all appointed in the last 12 months) is making a final call to the government to back its own policy commitment to advanced engineering and to retain production of vans and LCVs in the UK.
The cost of supporting LDV is small compared with standing back and letting it fail. The cost to the Treasury alone will be up to £53m in unemployment benefits and lost taxes in the first year, with the certainty in this environment of long-term unemployment to follow. 4,000 British jobs are at risk with over 1,000 in the Midlands region and many around Washwood Heath, which is already one of the highest unemployment areas in the country. In addition to the losses to the government, the economy loses over £200m of wages, purchases and export revenue.
Alternatively for a loan of just £60m, LDV could be refinanced to create a profitable new business playing a leading role in the UK governments drive to transform the industry into a high-tech business reducing carbon emissions.
Guy Jones, LDV Marketing Director told Tachoblog, “the two key drivers in the current light commercial vehicle market are to reduce cost and to reduce CO2. The MAXUS product is better suited than many of its major competitors to take advantage of these trends. There has been over £600m invested in the past few years in lightweight, fuel-efficient products with a low cost of ownership and the Electric MAXUS is now ready for production. It would be a tragedy if the UK threw away the opportunity of the return on this investment”.
The New Management Team have restructured the business for profitability, eliminating the major loss making areas of the business in previous years (£26m in 2008). Reductions in fixed overheads and labour costs combined with the benefits of the Sterling/Euro exchange rate have increased both the profitability and market potential of exports. There is clearly interest to expand sales globally, so with limited investment, LDV has a bright future based in the UK.
We have one final chance to secure this vital piece of industry in the UK and thousands of jobs which otherwise will be lost forever. The New LDV Management Team calls the Government to action, and challenges them to join the Banks to meet this refinancing request, to underpin a vital part of the UK economy.