Secret Dutch deal fear for Leyland DAF

Click to follow
The Independent Online
RECEIVERS last night moved into the British truck and van manufacturer Leyland DAF as fears grew that the Dutch and Belgian goverments might put together a rescue of its parent company in the Netherlands that freezes out the UK operations and their 5,500 employees.

John Talbot and Murdoch McKillop of Arthur Andersen, who were yesterday appointed joint administrative receivers of Leyland DAF at the instigation of National Westminster Bank, said they hoped to ensure the survival and sale of the business as a going concern.

However, any lingering hopes of backing from the British government for a financial restructuring of the business faded completely, despite reports last night that nine banks led by the Dutch ABN Amro had agreed a 60m ( pounds 22m) guilder facility to let the parent group pay wages and meet other expenses for a month. The consortium included the UK banks, Barclays, Lloyds and NatWest.

The appointment of receivers follows the collapse on Monday of talks aimed at rescuing DAF, which has estimated debts of 3bn Dutch guilders ( pounds 1.2bn).

Decisions on any redundancies among the UK workforce, which is based mainly in Lancashire and the West Midlands, are not expected to be taken until the weekend at the earliest.

Employees have been asked to report for work today, and limited production will continue at all its truck, van and component plants. But with stores of some key components expected to run out in two days unless supply lines are replenished, there are doubts about how long the plants in Leyland, Lancashire, and Birmingham can remain open.

Tony Woodley of the transport workers union, the TGWU, said yesterday that he had information that the Dutch and Belgian governments were working on a secret restructuring deal that would leave Leyland DAF out in the cold.

There were similar reports in Amsterdam where Dutch analysts said DAF planned to cut its worldwide workforce of 13,000 by a half, scrap production of light trucks, vans and defence supplies, and concentrate on medium and heavy trucks, production of which is based in the Netherlands.

A spokesman for Leyland DAF said: 'As far as we are concerned all of this is speculation.'

Any move to strip out production of lightweight trucks and vans would mean the effective closure of Leyland DAF with an estimated 15,000 direct and indirect job losses.

UK sources pointed out, however, that Leyland DAF's receivers now had a free hand to do what they considered in the best interests of bank creditors without recourse either to the parent company in the Netherlands or the administrator appointed to run it.

The UK is DAF's biggest single market, and the Leyland plant contains its most up-to-date manufacturing facility. Closing down Leyland DAF could also jeopardise pounds 200m worth of orders from the UK Ministry of Defence for troop-carrying and supply trucks.

Michael Heseltine, President of the Board of Trade, yesterday again ruled out direct short-term funding for Leyland DAF or government support for a debt restructuring, but said the Department of Trade and Industry might provide regional assistance for capital investment programmes.

Robin Cook, Labour's trade and industry spokesman, meanwhile kept up the pressure on Mr Heseltine by writing to Dr Martin Bangemann, European Commissioner for Industrial Affairs, asking him to intervene.

'If the European Commission will intervene in the European interest, Michael Heseltine cannot continue to refuse to intervene in the national interest,' he said.

(Photograph omitted)