Job losses expected as LDV folds

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The Independent Online

Vanmaker LDV was placed into administration today, threatening thousands of British jobs, after its parent company, Russia's GAZ, said it had exhausted all rescue attempts.

LDV, which has been battling for survival since January, said the firm's failure would immediately impact on 850 jobs at its Birmingham plant.

An LDV spokesman said a further 1,200 jobs were at risk on the dealership and distribution side of the business. An estimated 4,000 more involved with supplying the company with spare parts could also be lost, he added.

GAZ called it a sad day for the LDV workforce and British manufacturing.

"Over the last few months, we have fought relentlessly to find a solution that would ensure jobs and manufacturing remain in Birmingham," GAZ said in a statement.

'The company said it had chased a management buyout, approached numerous foreign investors, held extensive talks with government in an attempt to secure bridging funding, and attempted to secure an European Investment Bank loan.

"We have done everything we can to secure LDV's future in Birmingham but, unfortunately, time has run out," GAZ said.

Talks with Malaysian firm Weststar on a possible rescue package fell apart last week after it failed to find enough funding to complete the purchase.

The British government had already provided Weststar with a 5 million pound bridging loan. But it rejected the firm's plea for between 45 to 50 million more on the grounds that it was up to investors to stump up the cash, the LDV spokesman said.

"It's obviously the end of the line for GAZ's involvement," the spokesman said.

"You can't rule out Weststar coming in (again) and keeping it (the plant) in Birmingham or other investors coming in and keeping it there, or, the worst of possible outcomes: taking the assets abroad," he said.