Leyland DAF left out of Dutch rescue

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THE GOVERNMENT came under fresh attack yesterday for refusing to help to save Leyland DAF after it was confirmed that the company will not be included in the rescue of its Dutch parent.

DAF's administrators struck a deal over the weekend with the Dutch and Belgian governments and a group of banks to set up a new core truck manufacturing company based around its Continental plants. But they said they had been unable to include the UK truck and van plants because of the British government's failure to support the rescue operation.

The move casts a further shadow over the future of Leyland DAF, where 1,650 of the 5,500- strong workforce have already been made redundant by receivers called in earlier this month.

Louis Deterink, one of the two Dutch administrators, said: 'In Britain we were unable to contribute to a solution, mainly because the British government would not help.'

His comments provoked anger in Britain. Robin Cook, Labour's trade and industry spokesman, said: 'There could not be a clearer example of how Britain is losing out to countries with an industrial strategy because we have a government with none.'

Malcom Bruce, the Liberal Democrat's spokesman, described the Government's refusal to act as 'an absolute disgrace'.

The decision also disappointed the receivers of Leyland DAF, who had hoped the inclusion of the UK plants in the new company would provide a 'faster-track' solution to the crisis threatening the remaining 3,850 workers.

Under the weekend agreement, the Dutch and Flemish governments and financial institutions are pumping 450m-500m guilders ( pounds 173m- pounds 192m) of risk-bearing capital into a new company to be called DAF Trucks.

The two governments will provide 260m guilders, while the banking consortium led by Amro will provide 110m guilders. A further 50m guilders will come from other institutional investors and 37m guilders from DAF dealers, suppliers and importers.

The company will produce about 10,000 medium and heavy trucks a year - compared with the 26,000 trucks DAF built last year - and will employ about half the 6,500 employees in the Netherlands and Belgium.

As a sop to Leyland DAF, the administrators said the new company would consider taking the lighter 45-series truck made at the Leyland plant in Lancashire and axles from the Albion plant in Glasgow.

Last night the British receivers, John Talbot and Murdoch McKillop of Arthur Andersen, said they would now concentrate on finding a buyer from the 'very many expressions of interest from potential buyers the world over'.

The priority, however, was to get production at the Leyland plant restarted following the agreement of suppliers to resume component deliveries.

Allen Amey, managing director of the van plant, and Coopers & Lybrand are this week expected to approach institutions seeking backing for a management buyout.