Russian millionaire to build TVR sports car overseas

Last-ditch talks were taking place yesterday in an attempt to prevent the Blackpool-based sports car maker TVR abandoning Britain after its owner, the Russian playboy Nikolai Smolenski, announced he was relocating production to Europe.

Shocked union and local council officials were locked in discussions with the company about finding an alternative production site in the town although hopes of a last-minute reprieve for the 260-strong workforce were not high.

TVR announced in July that it had agreed a deal with the local council to move to a brand new state-of-the-art facility on a business park close to Blackpool airport in 18 months' time. In the meantime it said production would shift to a temporary site.

At the time Mr Smolenski said: "I am glad to secure the future of TVR in Blackpool." But late last month TVR disclosed that it would no longer be possible to move to the temporary location for health and safety reasons.

The company said yesterday it could no longer afford to wait for the new permanent site to be made ready and had therefore decided to outsource production to Europe. Turin in Italy, France and eastern Europe were all mentioned as possible alternative sites.

TVR's move represents the latest blow to the British car industry following the collapse of MG Rover, the closure of the Jaguar and Peugeot car plants in Coventry and cutbacks at Vauxhall's Ellesmere Port plant on Merseyside.

Union officials and local councillors said they were bitterly disappointed at TVR's decision after they had been led to believe that the iconic sports car maker would remain in Blackpool.

Mr Smolenski said: "We are extremely sorry that, after a period of uncertainty and raised hopes that we could continue production ourselves in Blackpool we have had to make this decision. We are acutely aware of the shock and distress this will cause for our staff and their families."

Later, during a break in talks with the company, Dave McCall, north-west regional secretary of the Transport and General Workers Union, said he did not want to build up hopes but the union and local authorities were determined to explore all possible alternatives to the company leaving Blackpool. "We have involved the regional development agency as well as Blackpool Council in our deliberations today. There are alternatives including trying to find other sites as well as looking at bringing in other manufacturers."

Linda Isted, a spokes-woman for Mr Smolenski, said: "If someone comes up with an extraordinary idea which has never been mooted before then TVR are going to discuss that, why wouldn't they? They are not Victorian mill owners who lock the door and walk away."

Privately, some union sources are sceptical about the talks producing a last-minute reprieve.

Mr Smolenski became an unlikely motor industry mogul two years ago when he bought TVR for £15m. It has been a roller-coaster ride since then. The capacity of the Blackpool factory is about 1,000 cars annually but last year it produced only 700 and in April this year half the staff were told to stay at home after Easter amid indications that output this year would reach only 450. Production of the Tuscan and Sagaris models has since slumped further and is running at an annualised rate of just 100.