Government pledges to help British vehicle-makers to survive the recession are “just talk”, a leading Birmingham industrialist claimed yesterday as LDV headed into administration.
Russell Luckock, chairman of components company A E Harris, a major supplier to LDV, said money needed to keep beleaguered companies afloat was not getting through months after it was promised. “The Government could save LDV today but it has not lifted a finger to help,” he said.
Mr Luckock said the Government had refused a “tide-over loan” offered to manufacturers developing low or zero carbon emission vehicles to the Washwood Heath vanmaker even though it had an electric-powered vehicle on the road.
“As a main supplier to LDV I was extremely saddened to hear the company had applied for administration,” said Mr Luckock, a noted commentator on manufacturing issues.
“I think it is absolutely dreadful that, despite all the research work it has carried out on developing new models, the Government is not the slightest bit interested in raising a finger to help this company. Gordon Brown still wants a service-based economy rather than one based on manufacturing. It just doesn’t make sense.
“I can’t see any help for industry coming through at all. There is no money, just talk, talk, talk.”
While stressing yesterday that “theoretically, everything is possible”, LDV chairman Erik Eberhardson, whose own efforts at engineering a management buy-out from parent group Gaz have failed, would not give odds on what he thought the company’s chances of survival are.
Speaking to the Birmingham Post from Russia, where he still works as non-executive chairman of Gaz which is itself fighting to survive the recession, the Swede would not be drawn on the continuing talks with a potential buyer for LDV, now known to be Weststar Group of Malaysia.
“I cannot comment on the negotiations because of confidentiality reasons, but I really hope that something can be put together,” he said. “But any solution will need bank backing and in normal circumstances there would be a broad variety of solutions available.”
Mr Eberhardson said in an earlier statement yesterday: “I fear for the future of LDV. If a solution can’t be found this would be a real tragedy given the efforts of all parties over the last two to three months and the hardships that among others the loyal workforce and suppliers have endured.
“It is somewhat ironic that since the MBO was rejected, which aimed to transform LDV into an advanced electric van company, the Government has made clear its desire to make Britain a leader in green vehicle technology.
“Despite this setback I will continue to work behind the scenes to try to develop an 11th hour solution for LDV and save the jobs and production in the UK.”
Speaking later to the Post about the financial hardships endured by the LDV workforce, Mr Eberhardson said: “I don’t really know what to say to them.”
Referring to efforts by cabinet office minister and Hodge Hill MP Liam Byrne to broker a deal, he said: “We at least have one supporter in the government.”
Rachel Eade, of Birmingham-based automotive supply chain supporter Accelerate, said: “This is another resounding blow for the West Midlands’ automotive sector. LDV has an award-winning product in the Maxus, a healthy order book and the research and design experience to create vehicles like the new electric van, which was months away from production.”
The region has a “single digit” number of companies with a relatively high exposure to LDV and they had been hit by the company not producing any vehicles since last December, Ms Eade said.
Birmingham Chamber of Commerce and Industry spokesman John Lamb said: “We can only express the hope that the new electric-powered van might excite an investor enough to want to get their hands on the green technology.”
Richard Boot, regional chairman of the Institute of Directors, said: “LDV has been struggling in a very difficult market for some time. I hope for the sake of the employees and the supply chain that this is not the end and that if LDV does go into administration a buyer can be found for at least a slimmed-down version of the business.”
Joe Morgan, the GMB’s regional secretary for the West Midlands, said the union would seek an urgent meeting with the company before the administration hearing. “It has to be accepted that the Government’s hesitance in offering financial assistance to LDV will have a major impact on the situation,” he said. “The innocent parties in this debacle are the LDV workforce.”