LDV, the Birmingham-based van manufacturer has gone into administration after efforts to find a white knight failed.
It had been hoped that a deal with Malaysian group Weststar would secure operations at the plant but when that fell through management were left struggling to find a buyer.
Last week The new LDV management team made a last ditch appeal to the government to come up with the cash to retain production of vans and LCVs.
The company argued that the cost of supporting LDV was small compared with standing back and letting it fail. “The cost to the Treasury alone will be up to £53m in unemployment benefits and lost taxes in the first year, with the certainty in this environment of long-term unemployment to follow. 4,000 British jobs are at risk with over 1,000 in the Midlands region and many around Washwood Heath, which is already one of the highest unemployment areas in the country. In addition to the losses to the government, the economy loses over £200m of wages, purchases and export revenue.
Management at the company believed that a loan of just £60m meant that LDV could be refinanced to create a profitable new business.
Marketing director Guy Jones said: “The two key drivers in the current light commercial vehicle market are to reduce cost and to reduce CO2. The MAXUS product is better suited than many of its major competitors to take advantage of these trends. There has been over £600m invested in the past few years in lightweight, fuel-efficient products with a low cost of ownership and the Electric MAXUS is now ready for production. It would be a tragedy if the UK threw away the opportunity of the return on this investment”.