Leyland Trucks to join with DAF

Press, 21 February 1987, Page 29

Leyland Trucks to join with DAF

NZPA-Reuter London The British Government has announced that the loss-making Leyland Trucks division of Britain’s State-owned Rover Group, and the Dutch truck makers DAF, would combine to form a new joint venture. The Trade and Industry Minister, Mr Paul Channon, told Parliament that it was hoped that the new company could be floated on the stock market within two or three years. The deal, which would involve the closure of two of Leyland Trucks British plants, included the Freight Rover division which makes light commercial vans, Mr Channon said.

He said DAF would have a 60-per-cent stake in the new venture leav-

ing Rover Group with the remaining 40 per cent

The deal is the latest move in efforts by the Prime Minister, Mrs Margaret Thatcher’s, Conservative Government to slim down. . the Rover Group — once the giant British Leyland company — and bring it back to profitability. Despite having 18 per cent of the domestic market, Leyland Trucks has been losing £1 million a week.

Opposition politicians and trade" union leaders have voiced fears that the deal with DAF would lead to niost of Leyland Trucks’ 7500 strong workforce losing their jobs, with one parliamentarian claiming that a further 15,000 jobs in ancillary industries would go. Mr Channon said just

over 2000 jobs would go at Leyland Trucks, but employment levels at Freight Rover would be maintained. -

He said the agreement offered the best chance of building a long-term future for Leyland Trucks and Freight Rover, adding “significant expansion of truck production at Leyland is planned.”

Part of the deal. includes the British Government providing £750 million toward writing off Leyland Truck debts, Mr Channon said.

The process of slimming down the sprawling British Leyland operation began with the 1985 sale of the luxury Jaguar car division and has accelerated since Canadian-born chairman, Mr Graham Day, took over last April.