Vanmaker LDV has confirmed that the “vast majority” of its 850 employees will be made redundant, following a court ruling to place the company into administration today.
The Birmingham-based company’s Russian owners said they had run out of options to rescue the company. Only about 40 staff members are expected to stay to keep the company ticking over through its restructuring.
LDV’s dealerships employ 1,200 people and some 4,000 people work for companies that supply it with parts.
According to the BBC, administrator PriceWaterhouse Coopers said they were talking to “interested parties” who may be able to take on part of the business, which included Weststar, the Malaysian firm with whom talks broke down at the last minute a week ago.
The adminstrator is also supervising the winding-up of affiliate company Birmingham Pressings Ltd.
Rob Hunt, joint administrator and partner at PricewaterhouseCoopers LLP in Birmingham, said: “The Companies’ financial difficulties, which culminated in the cessation of production at the Drews Lane plant in December 2008 and an application to court to place the companies into administration in May 2009, have been widely publicised in recent months. That application was withdrawn as the directors pursued a potential sale of the business to the Malaysian firm, Weststar. Last week, Weststar withdrew from the proposed purchase which left the directors with little option other than to reapply for administration.
Production at the Washwood Heath site has been at a standstill since the end of 2008, while the company awaited news of a potential buy-out or rescue plan.
Formerly Leyland DAF Vans, LDV has been owned by Russia’s Gaz Group, controlled by billionaire Oleg Deripaska, since 2006.
A spokesman for Gaz said it was “a sad day for the LDV workforce, suppliers and British manufacturing”.
