The future of LDV remains uncertain after the government indicated that it would not provide a loan to ensure the long-term viability of the West Midlands van maker.
The Birmingham-based group, which is owned by Russian engineering giant Gaz, had appealed for a bridging loan of more than £20m from the UK government.
Led by outgoing GAZ chairman, Erik Eberhardson, the request marked an attempt to keep the van maker afloat during a proposed management buy-out (MBO) that would see LDV transformed into a leading manufacturer of electric vehicles, safeguarding hundreds jobs in the process.
A spokesman for the Department for Business, Enterprise and Regulatory Reform (BERR) said: ‘We have provided considerable support to LDV in recent years and continue to offer it help including assistance with its application for funding from the European Investment Bank.’
However, the government has since issued the following statement: ‘We have written to LDV and reiterated our view that the primary responsibility for supporting LDV and the management buy-out rests with Gaz, but in the absence of such support from Gaz, we cannot see a case for further assistance from the government.’
The announcement follows a warning from LDV that it is running out of time and money after Gaz made the decision to put the firm up for a management buy-out.
The government’s announcement is a significant setback to the buy-out plans. LDV, however, remains hopeful of finding an alternative route to achieve its long-term goal of becoming a leading electric van supplier.
Eberhardson said: ‘We want to explore every avenue possible to save the company and the jobs. We still think that the company has a strong potential future as an electric van manufacturer, and the new ownership team, which is separate from Gaz, is prepared to invest its resources in that new venture if the government is able to give a short-term loan.
‘We are ready to sit down and talk with the government at any stage about what commitments each party is able to put in. We hope the government will accept our invitation to do so.’
LDV stopped van production on 12 December following a significant drop in demand from the commercial vehicle market.
An LDV spokesman told The Engineer that around 700 production workers have already been laid off and the collapse of the company could mean that the remaining 900 employees could lose their jobs, as well as the 1,200 in the dealer network and the 4,000 employees in the supply base.