Wednesday, January 14, 2009

AP Driveline and LDV add to the auto industry crisis

The crisis engulfing the West Midland car-making industry deepened as clutch manufacturer AP Driveline went into administration and vanmaker LDV said it was delaying paying bills.

The future of hundreds of companies seems to hang on an announcement expected from the government on Wednesday about a multi-billion scheme to restore credit to manufacturers and suppliers whose banks have cut off borrowing.

A question mark hangs over more than 200 jobs at Leamington-based AP Driveline after the company went into administration following a slump in work.

Russian-owned LDV told suppliers it was delaying payments to suppliers to help overcome a cash flow problem caused by the credit crunch and a downturn in van markets.

Production of the award-winning Maxus light commercial vehicles has been suspended until at least the end of January but manufacturing staff are being paid.


Read the full story by john Cranage at the Birmingham Post

The problems in the auto industry continue have a widening impact on the suppliers, many of whom are based in the West Midlands. The competitive nature of the auto component supply industry, means that few manufacturers have ever been able to build up substantial capital reserves from what has always been a low margin business.

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