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Is Rover Doomed?

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So what does the future hold for MG Rover and its 6,000+ employees, not to mention the thousands of jobs that are sustained in its supply chain? Will the company soon cease to exist? Or will the talks in Shanghai bear fruit? Even then, will that just be delaying the inevitable? It seems the company is a dead duck - and the public seem to have got the message loud and clear if the slumps in sales are anything to go by. Was this a self forfilling prophesy brought about by press reports? Even more importantly, just how many question marks can I use in one paragraph?

from the birmingham post

Let Rover 'go to wall'

Apr 6 2005

By John Duckers And John Cranage

The Government should let MG Rover go to the wall instead of "pouring good money after bad", a West Midland business group has said.

The comment came as Harold Musgrove, a former chairman and chief executive of MG Rover predecessor Austin Rover, described the carmaker's situation as "very serious indeed".

According to Bob Michaelson, regional chairman of the Institute of Directors, the £100 million the Government is said to be prepared to contribute to a rescue package for the Longbridge manufacturer would be better spent on job creation and re-training the company's 6,100 employees.

"Spending £100 million in the West Midlands is a far wiser use of the money than sending £ 100 million to Shanghai to prop up what is clearly a struggling company with a bleak future," he said.

"The subject of MG Rover is naturally very emotive but as a taxpayer I want to see the best use made of our resources, not just for the next month but for the future and to support generations that are just coming into work."

Mr Michaelson was speaking as talks aimed at rescuing the floundering life-saving joint venture between MG Rover and Shanghai Automotive Industry Corporation continued yesterday in China after appearing to have stalled on Monday night.

He continued: "The collapse of MG Rover would be a disaster for the West Midlands, but it would be up to all the organisations and local authorities in the region to pull together to mitigate the effects and create something positive out of a negative.

"Many of us remember the day when Round Oak Steel Works closed and 2,000 people walked out for the final time.

"Now that area has been revitalised and the Merry Hill shopping centre, the Waterfront business park and associated hotels, restaurants and pubs have created more than 10,000 jobs.

"We need to rediscover that spirit and get behind the employees of MG Rover to support them and try and ensure that their transition from initial redundancy to gainful and sustainable employment is as smooth and painless as possible."

In the event that MG Rover collapsed, it would be important that fair value is realised for all the company's assets and that the Longbridge site be made available as soon as possible to facilitate both inward investment by companies moving in to the area and promote and support start-ups in the south west of Birmingham, Mr Michaelson added.

A second business organisation warned that the collapse of MG Rover would have a " profound" impact on smaller supply chain companies.

"Many of the manufacturers involved in supplying MG Rover will be pushed close to the brink if the rescue package fails to materialise," said Nick Goulding, chief executive of the Forum of Private Business.

"If firms involved in the supply chain are forced to close it will cause grave problems for the remaining car producers across the country.

"Many may be forced to look elsewhere, probably abroad, for new suppliers and the job losses that follow will have a grave impact on the region's and the UK economy."

Mr Musgrove, aged 74, who ran Austin Rover from 1980 to 1986, said he was unaware of the financial situation at MG Rover, but added: "It would be folly to think it is anything other than very serious indeed."

But he insisted the company did still have assets which others would want - the K-series engine is one of the best in the world; the ability to design and manufacture suspension units; the MG image and a Longbridge workforce who were among "the finest carmakers".

However he went on: "I am sad that it has been allowed to get into this appalling state."

Giving his support to the workforce and offering hopes that the Chinese would stay involved, he nevertheless warned: "We must not fool ourselves or anybody else. Whatever we decide to do, it must be profitable."
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Rover was always going to struggle, and having to fight so much bad press hasn't helped. If it's true that production has stopped because suppliers are scared of not being paid, then those sections of the press who seem to have really had it in for Rover finally seem to have got their way.
As others have said, despite the "global" market, in other countries people do care. And as for British Leyland producing "decent" mass volume cars... their alleged "decent" cars are an albatross that hangs around Rover's neck - even now, the press just can't seem to help but mention the Allegro when talking about Longbridge!
potto said:
oh come on the British motor industry hadnt built a decent mass volume car since the decline of British leyland! Patriotic duties is what the British motor industry has always muddled through on! Now the public is tired and in this intense global market, where national identity of products is blurred, probably doesnt care. This is now a world of huge volume sales, world markets and conglomerations. The worry that we should have is if creativity and technology is stifled. We should be investing in research and not trying to hold up a dying company
Partial bollocks. The bit about BAe is correct, but you credit BMW with too much. They provided the money to develop the R75 and Mini, but ignored the bread and butter mid-size cars (and took the Mini with them). BMW wanted Land Rover's technology, they had no real interest in Rover.
MartinN said:
Uniformed hogwash.

The Government sold Rover to BAE after years of no investment. Once BAE took over they forged an alliance with Honda, and as a consequence became wholly reliant oh Honda for design & RD. They closed down Canley (Coventry) and sold off land at Cowley, and did not invest in the factories or design.

In fact, when Rover turned a modest profit, BAE did not put profits back into the firm. This took place when there was a global upturn in sales.

BMW were looking to expand, and wanted outright ownership of Rover. Honda refused to buy the company from BAE (Who were in financial difficulty and selling off non-core business) and would rather have had a large stake in it. So BAE sold to BMW. By now the firm was producing cars that were virtually Hondas.

BMW inherited a company with huge problems - they poured over a billion into upgrading Cowley, Gaydon & Longbridge & designs for new vehicles. However, the lack of investment and currency fluctuations were too much for them.

They were so determined to not shut down Longbridge -despite the fact that they had overcapacity - and keep a promise they made to the UK government that they plugged away with new models & designs, but Longbridge continued to drain on their resources.

I'm sick of seeing BMW blamed for this - Rover wasn't a viable business in 1975, and Bae would rather build Honda vehicles than their own.

BMW may have made some marketing problems, but the crux of the problem was Longbridge. It was inevitable that Longbridge would go. As far back as the 80s Margaret Thatcher was persuaded to keep Rover nationalised - this was because the chap running it (Edwards) knew that the Longbridge plant was unviable and would be closed down.
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