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Is Rover Doomed?

9449 Views 135 Replies 39 Participants Last post by  Engels
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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U475 Foxtrot said:
I despise BMW and hold them responsible for this sorry state. I know it's business but they got the know how to build 4x4s, the rights to rape the Mini marque and the BMW 100 (incidently developed from 3 series parts). On top of this they destroyed Rover who were seen as a potential threat to BMWs core business as they were taking the brand down market and set thier biggest Japanese rival Honda back a few years in europe. What a bunch of wankers. :skull:[/url]
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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MarcusValhalla said:
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.
They didn't "take" the mini with them - they owned it.
What you mean is they didn't _give_ Mini to PVH as part of the disposal deal.
Using language like that somehow implies that BMW stole something - they can't steal something they already own.

There was something Newsnight about a deal that may save the plant - although I fail to see how the brand (Owned by BMW!) can survive this.

It involves the DTI & some American hotshot.
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WeasteDevil said:
I feel that sometimes you just have to let go, reskill, and move on. It has happened with other sectors of the economy in the mid to recent past, textiles, coal, steel, etc. There is simply no sense in throwing good money after bad.


Interesting that Britian now produces more cars per annum than it has for a long while. Not British owned, but providing work non the less.
A lot of these industries were reliant on the British Empire for exports - Britain actually stopped India from producing its own cloth just so it could the stuff it made in the Northern mill towns to them.

The Machine tool industry in the UK was good, but the largest firm, Alfred Herbert, was run like a Victorian company, and when Herbert died the company fell apart - despite some excellent NC lathes. Most of these firms failed to break into the US market. Wickman , another leader, failed to invest in new machine design until the 70s.

The motor industry was underproductive and quality and design were variable, usually poor - the government used the motor industry to balance payments. When demand was high, there was never enough capacity, and people could not afford imports due to the duty of them. As soon as Britain joined the EU and dropped the heavy duties on imports, people bought Japanese cars. During the 1970s the government had to join all the British motor firms together and form BL, which was a total disaster. All the profitable bits were spun back out of it, leaving Rover under government control until the 1980s.

The Midlands has unfortunately missed out on the IT boom - despite the so called Coventry & Warwickshire Technology Triangle (Which perhaps collapsed when Marconi floundered). Not that there are any British computer firms left - ICL is now Fujitsu.
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U475 Foxtrot said:
Obviously this is written from an Austin Rover perspective but you may want to check this out this uninformed hogwash.

The only good thing I have to say about BMW is that they employ people at Cowley and the Hams Hall engine plant.
Totally biased and absolutely no evidence for the theory.

Whoever had taken over Longbridge would have had the same problems, and would have shut it down. BMW wanted Longbridge for volume Mid-Range cars.

They still own the Rover name, ironically.
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liverpolitan said:
What a disaster. In time it will be good to learn how the DTI could have acted more proactively and wisely to intervene and support the company through what should have been a transition rather than closure. I think the workers were let down by incompetent Whitehall civil servants, and their poodles in Advantage West Midlands. Others will want to try to blame the owners, and maybe they do share some of the blame.

It's such a pity, I really hoped that for once the company would be lucky, find a good partner, at the right time, and find a way back as part of a bigger grouping. The whole country seems a bit weaker and smaller without Rover.
How can it be the government's fault? Is it the government's fault that a private business goes bust due to cashflow problems? There was no chance it would find a partner with that amount of debt - it's got virtually no assets left, and huge debts, and virtually no market. There was nothing the DTI could do - you want them to keep pumping 25 million a month into a business that's bust? They've been there before and it didn't help matters much then.

I've been watching the news and becoming increasingly bemused by the attitude we're getting from the Rover workers - they seem to think they're hard done by because they're only getting the standard redundancy payout - why should they be any different to any other worker who's lost their job due due to liquidation? MG Rover's gone bust - there's no money for 30K payouts. it's being handled by the government - that was BMW's offer to get the place off their hands.

Maybe they should have taken it then instead of relying on Phoenix, who never had a decent business plan from day 1. Ford gave payouts when they closed Dagenham - they weren't bankrupt. They had the millions required to close down a business of that size and negiotated with the unions to arrive at a figure that was satisfactory.

They're claiming that "Rover _is_ the West Midlands" - eh? "Rover is a bastion of Britishness"? - Ha!

Surely they must have seen this coming? I've worked in firms that are going down the pan and the signs = usually the fact you're not selling anything - are blatantly obvious! Were they so blinkered by the "Jobs for life" attitude that they failed to realise it?
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Elizabeth Kinoke said:
You are a complete tosser with a typical Anti- British self depreciating attitude, you look at the negative side and then polarise it to the extent of revelling in it (especially if Brum is involved)... are you German, I wouldn't be surprised, did BMW build the Mini when it became world famous as a British institution in the Italian Job or when it was worshipped by millions of enthusiasts across the world, hard working Brummies at Longbridge built the Mini... does that hurt your sad little pride? Coventry gave in mate, they rolled over and accepted their fate like subservient pups and now they are stuck with part time retail gimps as oposed to highly skilled engineers, don't knock Brummies for fighting their corner thank you very much. :) Besides you're hardley a true rep for Cov are you...[/QUOTE

As a matter of fact, I work for a supplier Automotive industry and the company I work for has lost out due to Rover.

As for your comment about Coventry rolling over. What do you mean by that? The city had no say in private businesses closing down (And it wasn't just the car industry that experienced the same problems - look at Machine tool firms.) and Coventry's car industry was large, but relatively weak in that it was only assembly. Component manufacturers were mainly in Brum, which meant the Coventry factories were more likely to be closed down first. Rover in Coventry closed down in 1996.

Despite the claptrap we hear on the TV, most car jobs aren't skilled - they're overpaid assembly line jobs (Overpaid due to the union action in the 1970s). Browns Lane was purely assembly apart from the HQ function & wood workshop & I believe London Taxis is mainly assembly with engines & chassis imported from elsewhere. Similarly, Massey Ferguson, which closed last year.

AS for jobs: Coventry is home to Jaguar's Engineering & Design centre, which employs exclusively skilled engineers.

As for the Mini - it's still designed & built in Britain. So it the Jaguar. These are great brands and hopefully will have a great future - although it takes foreign investment & ownership to do it

All that Rover's done in the last 5 years is soak up huge amounts of money and what have we got to show for it now? Huge pension for the Phoenix 4, 6000 workers out of a job, and Chinese firm laughing its socks off.

Your accusations of anti-Britishness are almost laughable. Is that the best you can manage? Haw hw.
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Elizabeth Kinoke said:
There is a certain percentage of people in this country that will not rest untill they see it's complete demise, I am not one of those people, I admire our forefathers and what they toiled for endlessly, I do not blame Labour government in general rather I blame the insecurities and jelousy of British perps who are destroying their forefathers ingenuity.
Maybe half a century is not long enough for humans to learn of their MASSIVE mistakes. Please??? work together??? Bullshite!!!
Oh don't be so pathetic. Go and read up on the British car industry.
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Elizabeth Kinoke said:
The ROVER name is not a brum badge, it's cov i think? Austin founded Longbride with an amazing line of fighter aeroplanes to tanks and cars, where it all went wrong was in the post war years with cheap cov car companies.
Well, Rovers were made in Coventry as Bicyles first (Starley), then as cars. During WWII the Rover works were moved to Solihull (Where Landrover is now, I believe.)

No, it didn't all go wrong with "cheap cov companies". I suggest you educate yourself. There are plenty of books available on the decline of the motor industry.

It was a combination of things - government intervention, poorly designed plants (When compared to Ford in Dagenham, which was the largest in the UK) that were dispersed around the country. Companies merged and production was fragmented at different plants.

The post war years were actually very good for the British car industry - it did well on exports, but never managed to crack the USA.
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mk61 said:
It would seem that SAIC has run rings around the MG Rover board. And people were complaining about asset strippers when BMW sold the company...

This is asset stripping writ large - MG Rover has nothing left to its name but the badge and a large debt.
GM did the same to Daewoo.
cars are now being manufactured at Longbridge again, albeit only assembly but it is something that will hopefully expand, if only this new college could go somewhere here? that would be ace.
It's worth assembling vehicles in the UK for tax reasons - I believe if you import a car in a "kit" form, they are excempt from import duty. They can then be assembled quickly in the UK. This is probably why they are doing it, but it's such a small niche market they are aiming for...

I doubt they'll expand on it, as there's no need for another mass motor manufacturer in the UK - it certainly won't have the design and engineering centres that Rover had (Although most of that was at Gaydon and is now part of PAG.). That's all done in China now, although it's a bit of mess with different companies owning different aspects - the designs are owned by someone else - and Ford having the rights to the "Rover" name. (And being unwilling to allow anyone else to use it.)

Ho hum. Good patch of land to redevelop. The former Rover site in Canley now employs as many people as it did when it was a Rover Factory - except now it's a mix of companies and industries rather than all based around a single employer. So it may take a few years, but it sounds like good moves are already being made.
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^^There is a new name as they did not buy the rights to the Rover name. It will sound very similar but be spelt very differently. It was something Rauwor.
It's because Ford had first refusal over the name, and they chose to take it up. They do not want another manufacturer using the Rover brand as it may cause confusion with Landrover - part of PAG.
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Isn't it quite commonly accepted now that if Rover had gone to Alchemy in 2000, instead of to the Phoenix Consortium, there would still be a strong business in place, albeit with half the workforce? I think even Carl Chinn, who was one of the key public figures in the Midlands who was against Alchemy's plans, has agreed that in hindsight he probably backed the wrong people.
More like 1/4 of the workforce. Although Alchemy group actually backed out once they saw the company's books.
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Roewe is the SAIC one, who bought the model and possibly the Rover name.

The Brummie cars will be Nanjing and will be MG Rovers :yes:
Just MG - They can't use "Rover".
Ford bought the Rover name, to stop anyone else using it, as it owns Land Rover at the moment.
Yup, as I said earlier, Ford had first refusal on the name, and decided to buy it to avoid confusion in the marketplace.
Quite right all!

Incidentally, just to underline BMW's shafting of Rover, the bulk of their R&D resources and Budget at Longbridge went into the new Mini.

That is a product designed and engineered by Rover at Longbridge. That is what they were capable of. BMW took it with them, and left them with little or no product development on the drawing board.

But it's OK 'cos all the cretins that criticise Rover all drive BMW's.

And the cretins who endlessly blame the Germans are just ignorant - and the sad fact is that BMW still has a car factory in the UK (Along with an engine plant). There was massive overcapacity in the UK car industry, and the global car industry, and it was inevitable that some would close. Rover was a large factory producing vehicles that were not selling and were not even needed in the marketplace. The real "baddies" were the jokers who took it over, shifted bits of it around to line their pockets, and pretended to be keeping it going.
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