LDV and Jaguar Land Rover queue for Government loans

Mar 10 2009 by Alun Thorne, Birmingham Post

LDV and Jaguar Land Rover are set to finally go cap in hand to the Government for loans of tens of millions of pounds in a bid to fight their way out of the worst sales slump for decades.

Bosses from the crisis-hit Birmingham vanmaker and Tata-owned vehicle manfacturer will be among dozens of representatives from the UK automotive sector at tomorrow’s summit at the ­Department for Business in London.

The “crisis seminar” will outline the steps automotive companies must take to apply for access to £2.3 billion in ­government support originally pledged by Business Secretary Lord Mandelson six weeks ago.

LDV public relations and marketing director Guy Jones said the struggling van manufacturer faced a “race against time” to push through its plans for a management buy-out to clear the path for a new company producing electric vans for the commercial market.

The Washwood Heath factory has been at a standstill for nearly three months with about 700 production workers being forced to apply for state benefits after the company’s banked hours scheme finally expired.

Mr Jones said: “Our position is that we have spent a couple of years putting ­together our plans but we have run out of money to put them into production now. Here is a business that has got products ready to roll. It would be diabolical to have a Business Plan that meets all the requirements of the Government but which runs out of time.”

LDV is seeking up to £30 million in a commercial loan to help secure the factory’s future under the management buy-out proposals. But Mr Jones warned LDV needed funds urgently. “There is a race against time here – this cannot go on for very much longer at all.”

He said executives behind the buy-out believed they had a “stronger case than everybody else” in meeting government criteria for funding for green projects.

“At the end of the day, we are asking for a relatively small amount of money. We are expecting to find out on Wednesday what the criteria are and how you go about applying for support.”

Jaguar Land Rover spokesman Don Hume confirmed the company would be present at tomorrow’s seminar, including possibly chief executive David Smith. “Our position is one of a listening brief,” he said. “We understand the objective of the seminar is to provide details of how the government package will work. We will be there, we will listen to what is said and then we will consider it.”