It’s not been a great day if you are a car maker in desperate need of a bailout.
The news this evening is that the government has refused a £30m bridging loan to Birmingham-based van maker LDV.
Erik Eberhardson, boss of LDV’s Russian owners GAZ, says that LDV has just days left without an injection of cash. After that, up to 6000 jobs could go it’s claimed.
Eberhardson is trying to organize his own management buy-out of LDV and hopes he can bring an electric version of the Maxus van to market. However, he also needs another loan from the European Investment Bank.
Government sources reportedly claim that LDV’s application to the European Investment Bank for £53m won’t go far, either. Apparently, the government would have to pay half itself and guarantee the other half.
Meanwhile, reports from Germany say that the state won’t even consider helping to prop up Opel until it sees its business plan. Sources say Opel needs £2.9bn cash to tide it over until 2011.
The question of Opel’s – otherwise GM Europe's - viability is being batted backwards and forwards between Opel’s board, the German state, the unions and GM. The company’s business plan is due this Friday.
Over in Stockholm today, the Swedish government said there was no chance of it underwriting loan guarantees for Saab unless it can find a private investor.
Industry minister Maud Olofsson was quoted as saying that she wanted to see ‘secure ownership …which takes responsibility for the Saab business plan’.
Although Saab says there has been interest, the chances of securing a new owner – or significant investor – over the next few months will be slim
Even worse, Saab now says it will sell just 65,000-70,000 cars in 2009, down from 95,000 last year. It needs to make 150,000 per year to be profitable.
As I said, it was not a great day for ailing car makers.
However, it’s ironic to think that the politician who gave her name to this kind of unsentimental approach to failing business actually spent over a billion pounds propping up British Leyland and its successors.
Mrs T would probably also be amazed to learn that a piece of the old BL empire - Leyland Daf Vans - is again looking for state help some 30 years after she first came to power.