Troubled British van maker LDV has today filed for administration after a proposed management buy out of the firm collapsed.
Government has confirmed it will not bail out the West Midlands based automotive firm but it reiterated there would be “a range of government support” available if the company survives.
Eight hundred and fifty UK staff will lose their jobs if the firm is liquidated.
“The pressure of the unprecedented global downturn, coupled with the actions of a small number of suppliers, has caused the position of LDV to deteriorate to the point where LDV has been left with no alternative than to apply for administration,” said a spokesman for LDV.
The application is due to be processed on May 6 and talks with one potential investor, a Malaysian firm that would reportedly keep production here in Britain, are not thought to be likely to be completed before that date.
LDV, owned by Russian oligarch Oleg Deripaska, had a bid for £4-5m of public money in bridging loans rejected by government in March. That was to tie the company over until a management buy out by members of LDV’s parent company, Deripaska’s GAZ Group, and then help the company secure further fu ndinmg from the European Investment Bank thereafter.
The van maker has not produced a vehicle from its lines since falling into financial difficulties late last year. Most of the staff there have not been working since then and have received only limited pay.
Unite official Tony Woodley said government must now put up the £4m to keep the company afloat until discussions with potential investors bear fruit.
“With so many skilled jobs at risk and with a genuine possibility of a buyer, if this company goes to the wall for the want of arelatively small amount money, then it would be criminal,” he said.
Erik Eberhardson, GAZ Chairman, said: “I will continue to work behind the scenes to try and develop an 11th hour solution for LDV and save the jobs and production in the UK.”