The van production, LDV firm has come under threat due to financial difficulties and has called on the Government to provide it with assistance, according to reports. This may be of interest to van insurance customers.

However a rescue plan had been rejected as The Business Department and political figures took a tough line over LDV's request for a £30 million bridging loan, stating it was up to parent company, the Russian firm, GAZ to fund the company’s losses.

The Business Secretary, Lord Mandelson, backed the Government’s decision against the rescue plan that LDV wanted.

No help from the Government

The Department for Business, Enterprise & Regulatory Reform (BERR) also added: "In the absence of support from GAZ, we cannot see a case for further assistance from the government beyond the previous £24 million loan, which has not been repaid, and other support made more recently."

Lord Jones said in the case of LDV it was not the government’s role to take the place of the Washwood Heath Company’s billionaire Russian owners.

He added: “That is not to say that I do not support the men and women who work at LDV. I would like to see taxpayer’s money used through the various agencies to ensure the workers have the skills they need to help them when we come through this recession like similar to the work done by the taskforce set up after Longbridge closed.”

At present, around 850 jobs at the Birmingham factory of LDV are at risk, along with 1,200 jobs in their network of dealers. In addition, around 4,000 staff is at risk of losing their jobs at the company’s suppliers. The Business Minister, Ian Pearson, Erik Eberhardson the Chairman of GAZ, and management members at LDV held talks. After the meeting it was said that the talks will continue, and they believe that the future of LDV is viable.

Making the most

The firm is looking to make the most of the options that it has. LDV recently stated that it endeavours to become a producer of electric vans, which can help the firm create a positive image, in regards to the environment.

Lord Jones also said that the fundamental issue for LDV was that its product was not up to the challenges brought on by the recession.

He explained: “Essentially it is the product. It’s a commodity in an extremely competitive sector against some of the biggest names in the business. There is not a huge profit margin in vans and it is very tough sector at the moment.”

However, not all people were in agreement with the Government’s decision not to provide the funds that LDV sought. The Conservative councillor for Northfield said: “I am sure everyone will express concern about the future of LDV. I am shocked that the government can’t even manage to find a £30million bridging loan to support the company.”

The outgoing GAZ chairman Mr Eberhardson recently said: “Unfortunately, since the company is not producing it is not making enough revenue to cover its costs. It is literally running out of cash as we speak.”