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Skids under Europe's truck manufacturers

THE EUROPEAN truck industry was facing a further shake-out yesterday as DAF, the Anglo- Dutch manufacturer, began the grim struggle for survival after being forced to seek court protection from its creditors, writes Michael Harrison.

The first casualty is likely to be Leyland DAF, the UK subsidiary, which has been worse hit than most by the recession that has swept Europe's truck markets.

The restructuring plan being worked on by DAF had been expected to lead to 1,000 UK job losses. The danger now is that more of Leyland DAF's workforce of 5,500 will face the axe as its receivers move in.

In the past three years the European market for trucks of more than six tonnes has slumped by 20 per cent to just under 250,000 and is expected to fall a further 8 per cent this year.

In Britain, once one of the biggest truck markets in Europe, the decline has been even more severe. In 1979 Leyland alone made more than 30,000 trucks - nearly all for home consumption. Last year total UK sales were only 31,400 - down by almost half from the level of the late 1980s.

As UK market leader with a share of 25 per cent, Leyland- DAF has been hardest hit. It was not, however, the first to go under. Last June, AWD, the company that took over Bedford Trucks in Dunstable, succumbed to the receivers, with 650 job losses. Although the remnants of AWD were bought from receivership in December by Marshall's of Cambridge, production will never reach the 8,000 dreamt of under its previous ownership.

Since the early 1980s a rash of mergers across the European truck industry has seen thousands of jobs disappear along with a handful of famous names such as Scammell. Ford put its truck operations into a joint venture with Iveco, the Fiat subsidiary, while Renault and Volvo also merged their truck divisions. The initial merger of Leyland and DAF in 1987 cost 2,000 jobs.

Despite this rationalisation only three of Europe's seven big truck makers - Scania, Mercedes-Benz and MAN - are thought to have been profitable last year. Last night truck makers were wondering whether their number was about to become six.

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