Kenneth Clarke calls sale of LDV 'a disaster' for Washwood Heath

Oct 19 2009 by Paul Bradley, Birmingham Post

The demise of LDV and the sale of its assets to Chinese owners is a “disaster” for Washwood Heath, the Shadow Secretary for Business Kenneth Clarke has admitted.

In an interview with The Birmingham Post, Mr Clarke said that he feared Eco Concept Ltd were mainly interested in shifting technology and production to China. in a repeat of what happened to MG Rover at Longbridge.

He told The Post that he would not expect the Government to step in to help the new owners of LDV keep the bulk of their business in the Midlands and said it was time for its former workforce to look for alternative jobs.

Mr Clarke, who was visiting Redditch to open an electronic company’s new offices, said: “LDV is a disaster but there is nothing any incoming government could do to step in and reverse things.

“I fear the Chinese are mainly interested in shifting technology and production back to China, which is the inevitable next step. That is what happened with MG Rover.

“This is extremely serious for Washwood Heath but people there must now start looking for alternatives to LDV.”

Last week Dr Qu Li’s Eco Concept Ltd was named as the buyer of the collapsed Birmingham van manufacturer, ending a marathon nine weeks of negotiations.

The deal brought an end to more than a century of manufacturing at Washwood Heath and marks the death knell for hundreds of jobs at LDV and possibly at dozens of its former suppliers.

Eco Concept plans to start a new company producing and assembling low-volume specialist light commercial vehicles.

It is hoped vehicle trials will begin within 18 months.

Around 200 staff are to be employed at the new business, which is likely to be relocated to Longbridge, the current home of SAIC-owned MG UK.

LDV collapsed in June with debts of £75 million and the loss of more than 800 jobs following a dramatic slump in the commercial vehicle sales sector.

Mr Clarke added: “I’m afraid it seemed to have an air of inevitability about it. I don’t think it would have been right to press the Government to rescue it yet again.

“In the present climate, it was losing a great deal of money and it was very difficult to see how it was going to make a future in a market where there is great excess capacity.

“This is a disaster for Washwood Heath. I think what is going to matter there is how quickly you can get the local economy to revive and how quickly you can get investment in to the area and some replacement jobs. People there may need some re-skilling to pick up their careers in something else.”

Mr Clarke’s comments came after MP Liam Byrne warned that east Birmingham now urgently needs investment following the sale of LDV’s assets.

Mr Byrne (Lab, Hodge Hill) said he was “gutted” at the plans by LDV’s new owners to end manufacturing in Birmingham, threatening thousands of jobs.

He called on local politicians and West Midlands business leaders to work together to prevent the east of the city sinking into unemployment and poverty.