Leyland DAF could shed 3,250 workers this week

UNIONS at DAF's British truck and van factories are bracing themselves for thousands of job losses by the end of the week, following yesterday's announcement of more than 3,000 redundancies at the group's Continental plants.

Last night the administrative receivers of Leyland DAF warned the 5,750 employees that 'job losses in the UK are inevitable'. As many as 3,250 jobs at Leyland DAF are thought to be at risk, following the collapse of its Dutch parent company with estimated debts of 3bn guilders. An announcement is expected by Friday.

In a letter to Leyland DAF employees, the receivers, John Talbot and Murdoch McKillop of the accountants Arthur Andersen, added: 'We believe there is a future for Leyland DAF albeit at a reduced size.'

Yesterday the administrators of DAF said that at least half the 6,500 workers at the heavy trucks plant in Eindhoven and the Westerlo cab factory in Flanders, Belgium, would lose their jobs.

They also disclosed that talks had taken place with the UK receivers to see whether some of Leyland DAF's activities could be included in a proposed new company into which DAF's core truck manufacturing operations would be transferred. Mr Talbot and Mr McKillop said they were keeping an open mind about the proposal and would be 'exploring all options' including that one. Earlier their spokesman said it was 'a front runner'.

According to reports from Amsterdam, the Dutch state would invest 225m guilders in the company, New DAF, making it the dominant shareholder.

The only UK plant likely to feature in the new set-up is the Leyland factory in Lancashire, which employs 2,500 and manufactures light trucks. This places a question mark over DAF's four other UK plants.

The most vulnerable is the van factory in Birmingham, employing 2,000. The future of the plant was already uncertain because of doubts that a joint venture with Renault to produce a new van, the Excel, will go ahead.

Also at risk is the Albion axle plant in Glasgow, which has a workforce of 500. DAF's parts warehouse at Chorley, Lancashire, employing 450, and its marketing and sales division at Thame, Oxfordshire, which has 350 employees, might be retained in some form but how many of the jobs would be saved is unclear.

John Allen, chief negotiator for Leyland DAF's biggest union, the Amalgamated Engineering and Electrical Union, said he was 'very concerned' at developments. British union leaders travel to the Netherlands on Thursday for talks with DAF officials.

The Transport and General Workers Union said British financial involvement in the new company to run DAF's core truck activity was a 'cynical betrayal' of Leyland DAF UK workers in the interests of bank investments.

There has also been speculation that parts of DAF may be of interest to Paccar, the US truck company, Mercedes-Benz and their own managements. Rod Heather, managing director of Paccar UK, declined to comment last night but the company is not expected to move for some days even if it does decide to make an offer.

Mercedes-Benz meanwhile said it had 'absolutely no plans' to take a stake in DAF although it was still involved in talks about possible co-operation.

The Birmingham and Glasgow plants were both working at reduced levels yesterday but there was no production at Leyland.