The only game in town gives up

The future for LDV is looking very bleak indeed. Hundreds of jobs are at risk, perhaps thousands at suppliers.

Ministers refer to the bid from the mysterious Malaysian company Weststar as “the only game in town” and that’s why they advanced a controversial £5m “bridging loan”.

Well, in the event Weststar availed themselves of just a third of that, £1.4m, before bailing out of takeover talks. Weststar could not raise money from three different companies in Malaysia: a pension fund, a bank, and an auto company.

At that point Weststar is believed to have re-approached the government for around £45m worth of guarantees. The government said no, unswayed by the current fashion amongst former free-marketeers for state capitalism in the auto industry.

What are we left with? The only game in town has given up. The government has said “no”, pointing to LDV’s prolonged lossmaking. And LDV’s current owner, which does have the necessary cash, has had its head turned by the bigger prize of GM Europe/Opel.

In the absence of a viable business plan it’s all in the hands of the administrators. A lift and shift of the production line to the east, and a knockdown sell-off seem highly likely. It would be a sad end to a long history of van making that stretches back to Morris Commercial Vans.

But for the car industry, unlike the banks, the government seems to want to adhere to the strict principles of Anglo-Saxon economics, even as they are abandoned elsewhere.