Vanmaker LDV is expected to be placed in administration by a court today, threatening up to 850 jobs.
The Birmingham-based van manufacturer faced administration earlier this year after struggling with falling demand. One potential buyer, Malaysian company Weststar, which makes LDV vans under license, came close to a deal to rescue the troubled British company.
In May, Weststar had agreed a deal with LDV’s Russian owner, Ole Deripaska. But talks with Weststar broke down last weekend, and LDV has applied for administration.
A break up of LDV’s assets is likely to mean its capital equipment will be sold-off , potentially to overseas buyers.
If that happens, it is likely that up to 850 jobs will be lost at the Washwood Heath site in Birmingham. Many more jobs are at risk in the supply chain.
Commercial vehicles have been built at the site since the company was formed as Leyland DAF Vans in 1993, but production has been virtually frozen since December 2008. Production was due to recommence in July had the deal with Weststar gone ahead.
Parliament lobby bumped by reshuffle
LDV employees were angered last week when they were forced to cancel a planned lobby of Parliament because of PM Gordon Brown’s cabinet reshuffle.
Directors had hoped to persuade the government to agree to a £60m loan to secure the firm, but no ministers were available to meet them.
LDV argued that the cost to the taxpayer of advancing the loan would be less than the cost of allowing the business to fail.
In addition to the workforce, the vanmaker employs 1,200 people in dealerships and is a big customer for the local automotive supply chain.
Earlier this year LDV had made strong commitments to develop and make greener models of vans, to benefit from government funding for manufacturers of low carbon emission vehicles and to satisfy changing demands.