A statement released by Weststar yesterday said that "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... 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 went on to say that "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."

That's the long-term plan. Short term, even if the deal goes through there are likely to be job cuts at LDV. Indeed, the firm has been careful to say that they cannot guarantee all of the 850 jobs given that the commercial vehicle market is down by 40-50%.

Lessons learned from the Rover Task Force in helping workers retrain and move on will sadly be needed again for LDV workers.

What is welcome this time around, though, has been a proactive (if belated) intervention by the government to avert catastrophic closure. Reactive measures to assist workers made redundant to move on will also now be needed.

Going forward, the firm needs scale (hence the need for assembly in Malaysia and sales in Asia) and investment in green R&D. What has been largely overlooked by much of the London press - with the notable exception of the Financial Times which has given LDV quite a fair write up - is the heavy investment (of the order of some £600 million) that has been made in the plant and in the Maxus product.

LDV is spot on in aiming the new electric version of the Maxus van at local authorities, postal services and online retail firms like the major supermarkets, where drivers make lots of depot-to-depot, short journeys each day. The logistics and economics of electric vans in this emerging market will make sense in time. Government measures to support the electric car market from 2011 could also benefit LDV.

Public procurement (by local authorities, the Royal Mail, universities, hospitals and so on) could also play a key role in stimulating this new technology, with a real environmental benefit.

Birmingham City Council has already shown support for LDV by indicating a desire to buy LDV vehicles. Electric vans should be part of that.

Further R&D is needed, so it is thought that LDV will be applying for European Investment Bank and/or British government support for R&D in developing the green Maxus van.

Factor in the competitive boost offered by the depreciation of sterling (down by over 25% from its trade weighted peak) and the case for continued production at LDV starts to stack up.

And that's even before we look at the contribution of LDV and its supply chain to the government coffers which is considerable. In previous blogs I've pointed out that through NI and PAYE paid by LDV workers and the workers in the supply chain, the government probably picks up a very useful £15-20 million a year from LDV's operations. Add in some £50 million in purchasing and £50 million in exports and you can see the value of LDV to the economy and the government.

One final point; overseas the electric van market has been supported by tax breaks - something the government here could do to help LDV and Modec in Coventry. The government has rightly intervened to help save LDV. It now needs a clear long-term industrial strategy that backs green R&D through investment, tax-breaks and public procurement. The government has made some wlecome steps but can go further, for example through better tax-breaks for firms buying ekectric vans.

For a Weststar statement today to LDV employees, click here.

Professor David Bailey works at Coventry University Business School and is Chair of the Regional Studies Association.