Suppliers threaten hopes of DAF rescue

THE RECEIVERS of Leyland DAF warned last night that hopes of rescuing the business were being jeopardised by the refusal of a small number of key suppliers to resume deliveries to its truck and van factories.

The warning came as the receivers, John Talbot and Murdoch McKillop of Arthur Andersen, prepared to announce heavy job losses following the collapse of Leyland DAF's Dutch parent.

More than 1,000 job losses among the company's 5,500- strong UK workforce are expected today or tomorrow despite a plea yesterday from unions for the receivers to hold off issuing redundancy notices until the future of the company was clear. During three hours of talks on Merseyside the unions were told that job losses were inevitable.

Despite desperate efforts to resume production, the Leyland trucks factory in Lancashire remained at a standstill yesterday while only a handful of vans were built at its Birmingham plant.

The suppliers that have refused to deliver include GKN, which provides axles and prop shafts, Cummins, the engine manufacturer, and Motor Panels of Coventry, which makes truck cabs.

Mr Talbot said last night: 'Whilst we appreciate that for many suppliers the failure of Leyland DAF is an extremely serious problem, we would urge reluctant suppliers to think very carefully about the possible consequences of their actions.' It was important that production was maintained to allow the receivers to 'buy the time necessary to develop our plans to ensure the survival of the businesses and their ultimate sales as going concerns'.

The outlook is bleakest for the Birmingham van plant and its 2,000 workers, who are likely to bear the brunt of tomorrow's redundancies. The receivers are not expected, however, to announce the closure of the site, as had been feared in some quarters.

GKN, which supplied both UK plants and DAF's heavy trucks plant in Eindhoven, said: 'We discontinued supplies when DAF went into receivership and that remains the position as of now.'

A spokesman refused to say if and when supplies were likely to resume, saying that was a 'commercially confidential matter' between GKN and the receivers.

Cummins, which makes engines for Leyland DAF's best-selling truck, the 45 series, insisted last night that it had been awaiting instructions from the receivers and had not spoken to them until yesterday morning. It hoped to get supplies moving but could not say when they were cut off nor when they would resume. Motor Panels was unavailable for comment.

Mr Talbot held further meetings yesterday with the receivers of the Dutch parent company about including the Leyland trucks plant in New DAF, the company being set up with the support of the Dutch government and banks to take over the core truck manufacturing operations.

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