Cash-stricken LDV has been placed at the head of the queue for vans for a major Birmingham City Council housing contract in another boost for the closure-threatened factory.
The council has declared LDV the “preferred supplier” for vehicles for the authority’s south repairs contract, an order potentially worth millions of pounds.
Days ago the authority agreed to write off £1 million in business rates and seek orders for more than 100 vehicles following emergency talks between council leader Coun Mike Whitby and the van-maker.
Now Coun John Lines, Cabinet Minister for Housing, said he had asked his officers to consider LDV for a key transport role in a repairs contract for south Birmingham. Covering 26,000 properties over 36 and a half square miles, the contract is one of the largest on the city’s books, with the current supplier operating 167 vans.
Coun Lines said: “The new contractors will need vans for repairs operatives and supplies. I have asked officers to consider most carefully the option of specifying that LDV should be the preferred supplier for our south repairs contract. I am expecting an urgent report.”
The new contractors will be chosen in the next few months, with a contract beginning in 2010. “A sizeable future order on your books would be a great boost to LDV. I will do all I can to see it happen,” Coun Lines added.
In a letter to LDV managing director Evgeniy Vereshagin, Coun Whitby said the council wanted to secure orders for 100-plus vehicles in the next year, an order worth about £1.5 million. The authority was writing off £200,000 in unpaid business rates and offering the factory a 12-month rates holiday worth another £800,000 to the van maker.
A total of 3,110 people have signed the Save LDV petition on the No 10 Downing Street website as potential investors seek to conclude talks over a management buy-out to save the factory. This week it was revealed that the van maker needs £1 million a week to keep its creditors at bay. More than 800 jobs at Washwood Heath nd thousands more in the supply chain are at risk.
Gaz, the Russian owners of the van firm, are desperate to find a buyer, as the firm is facing a cash crisis of its own – the automotive company has about a billion pounds in debt. Bosses at Gaz are believed to be in talks with giant Indian group Mahindra and Mahindra about a potential sale of LDV. The Indians are the most likely to keep the firm out of administration.