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NEWS UPDATES 17 May 2009

Malaysian importer plans to restart UK LDV production

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Malaysian vehicle importer Weststar plans to restart production at British vanmaker LDV by July if its takeover of the company goes ahead, Reuters quoted Weststar as saying in a statement on Saturday.

Weststar said it intended to maintain production at the company's plant in Birmingham, central England, but would also expand manufacturing in Malaysia.

Weststar has agreed to buy the vanmaker from Russia's GAZ Group (GAZA.RTS) for an undisclosed sum, but is in the process of completing due diligence and arranging finance.

LDV halted production in Birmingham in mid-December after demand slumped and GAZ was hit by funding problems.

LDV applied for administration earlier this month after running out of cash, but intends to withdraw that request at a court hearing in Birmingham scheduled for Monday.

The British government has provided a bridging loan of 5 million pounds ($7.60 million) to keep the company afloat while Weststar tries to complete the deal. LDV employs 850 people and thousands of jobs in the region would be at stake were it to go out of business.

"After completion, Weststar intends to continue production and research at the Birmingham facilities, using best practices including the highest standards of labour and energy efficiency in the industry," the statement said.

"Meanwhile, to make LDV products more affordable in the developing world, Weststar will expand the scope of manufacture in Malaysia and other low cost manufacturing centres in regional trade blocs," it added.

"This strategy will see employment and value creation in the UK and Malaysia significantly increased over time .... Weststar hopes to have LDV production re-started by July 2009."

Guy Jones, LDV's director of marketing and PR, told Reuters on Friday that not everyone at the Birmingham plant would get their jobs back if the takeover went through.

"At the moment, the commercial vehicle market is down 50 percent, or 45 percent, we will have to have the appropriate level of manpower for the production. Yes, there are going to be less people here initially than there were in December," he said in an interview.

LDV is planning to focus on developing electric vans for use by local authorities and online delivery businesses.






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