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UK Government aid for LDV

Editorial Staff

Ah, LDV. Time was when Leyland Bus and Truck was the global leader in - well, buses and trucks. The Leyland Atlantean and its close sibling the Daimer Fleetline are still the iconic vehicles that underpin (in spirit, at least) the world's public bus transport system even today. Now a mere shadow of its former glory, LDV makes light vans - and does it very well. But it's a highly competitive market.

Ford owns Volvo cars, for now, at least. But it does not own Volvo trucks. Several years ago, Volvo built both cars and truck - and it bought small Dutch small car manufacturer DAF, largely to gain access to its variable speed transmission. It whined like a sewing machine but worked like a dream.

When Volvo cars was sold, the clever tech went with it. Ford never capitalised on it although it has, from time to time, tried to produce a system with similar effect but different technology.

DAF's lorry business remained independent, eventually taken over by US company PACCAR Inc.

But, as Leyland became British Leyland and then imploded, the light vehicles divisions of all three came together to form Leyland - DAF - Volvo or LDV.

LDV went from crisis to crisis. Its model range was based on the old Leyland platforms. Eventually, like so many UK companies with great brand names but not so great products, it was sold to Russian interest, in this case GAZ a conglomerate that makes motors amonst many other things bought LDV in 2006.

But GAZ, faced with mounting debts, wants out. And, quietly waiting in the wings, are interests from another country that is quietly building up a significant UK portofolio - Malaysia.

Since 2007, Malaysia's Westar have built up a substantial business for LDV assembling LDV MAXUS vans in 20 countries across Asia. GAZ is in deep financial trouble at home and needs to take support from the Russian government. Commentators in Russia say that it is difficult to ask the Russian taxpayer for money to support a UK business.

Yesterday, LDV was listed in the Companies Court for possible entry into administration. But Westar stepped in and offered to take the company off GAZ's hands. Although details are not yet finalised, the deal is regarded as so promising that the UK Treasury stumped up the - admittedly small - amount of GBP5 million to keep LDV going. But it's not going to be for long: the court hearing was adjourned for just one week to see if a deal could be finalised.

For LDV Weststar, the purchase will secure a supply line - albeit one that has been idle for four months. In Malaysia, LDV Westar has good government contacts and the Malaysian government runs MAXUS vans in some divisions. Those contacts extend across ASEAN and beyond.

The money from the government is a one-off bridging loan and the UK Treasury says it will not be extended.

Yesterday, LDV's management issued the following statement:

"Following yesterdays important announcement by the government, the management team at LDV have released the following statement to clarify the position of the business today and the key next steps.

Firstly we want to thank the government, Liam Byrne, MP for Hodge Hill, in particular and all the key parties who have been involved in helping secure a future for LDV in Birmingham and British jobs. We appreciate that this is a difficult time for the government, but this support allows time for negotiations to be concluded to secure thousands of British jobs, when the alternative would almost certainly have been the loss of them all.

Last week the directors of LDV were forced to apply for administration to protect the assets of the business and a court hearing was processed this morning. Following the confirmation of Weststar as the investor and the support of the government last night , the decision was taken to delay this hearing until Wednesday 13 May, when the case to continue the business will be presented.

It must be clarified at this point that whilst a sale has been agreed, it will take another few weeks to be completed and the loan from the government is to enable the business to continue operating whilst this process takes place. We need continued support from our employees, dealers and suppliers over this period to finalise this process and restart production and sales of MAXUS commercial vehicles.

This is clearly a significant development for LDV and a major step towards an exciting new future but there are still major steps to be competed over the next few weeks. We will issue further communications as soon as they are available"