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· Yep
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Discussion Starter · #1 ·
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."
 

· Yep
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Discussion Starter · #4 ·
It seems production has been halted at Longbridge until the £100m bridging loan comes through. Some suppliers are refusing to deliver because they think they wont get paid.

I dont think production will ever restart :(
 

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Discussion Starter · #55 ·
It'll be interesting (to say the least) to see what the administrators will do if they find SAIC owns the intellectual property rights to the rover 25/75 and the K-series engine. This is a possibility - thanks to the c£60 million deal between SAIC and MG Rover last year. If they do, there's nothing to stop SAIC tooling up to manufacture the vehicles now. PwC dont really know what assets they have left to sell - at least that's what I understand the situation to be.

If we come out of this with a functioning company producing MGs at a scaled back plant we ought to count ourselves lucky.
 

· Yep
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Discussion Starter · #63 ·
very definite now.

Hopefully the useful bits can be spun off and turned into something sucessful - the engine, powertrain and suspension bits of the group are still pretty useful, as well as the MG badge. Can production be reconstituted at Longbridge? Unlikely any time soon. It would require big investment in a brace of new models and a turnaround in consumer confidence in the Longbridge product, and all that exists now is reported £400 million financial hole and lots and lots of ugly headlines.
 

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Discussion Starter · #71 ·
JUXTAPOL said:
Only recently heard about this "SAIC owns the intellectual property rights to the rover 25/75 and the K-series engine". If true then no wonder the Chinese werent really interested in investing in the company. They already own a decent chunk, and can use a fraction of the £1billion to buy the rest and move it all to China, or is it more complicated than that. Also if BMW own the Rover name, is there a possobility they could do something, start afresh in a new factory, what with the success they have had, with their current British operations.
Thats one rumour - unconfirmed. Its a complicated situation. The Rover name is owned by BMW and was used by the MG Rover group on licence.
 

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Discussion Starter · #88 ·
As I suspected - SAIC already owns the intellectual property rights to the 25, 75 and the K series engine. No wonder they pulled out of negotiations - they already had most of what they wanted for £60ish million up front. Why buy trouble?

What a way for the company to go - it had the rug pulled from under it.

Chinese to make Rover flagship cars

Birmingham Post Apr 21 2005


By John Revill Manufacturing Editor


The Rover 75 and 25 could be made in the Far East by the end of the year, it emerged last night.

China's state-owned car maker has approached suppliers in the Midlands as it presses ahead with plans to build models in Shanghai which will carry the Rover badge.

The Birmingham Post has learned that Shanghai Automotive Industry Corporation (SAIC), which last week finally rejected any rescue deal for the Longbridge firm, has already contacted several largecomponents makers which used to supply MG Rover.

A source close to SAIC said: " Exploratory letters have gone out to components companies to test what the pricing structures would be for their parts.

"But it is too early for a decision on making the cars in China."

Local politicians said the latest development would be devastating for the 5,000 Longbridge workers who received their redundancy notices on Monday.

But business leaders said it would provide some consolation for components makers hit by MG Rover's collapse.

Jerry Blackett, policy director at Birmingham Chamber of Commerce and Industry, said: "We wish it was different circumstances, but the fact that first-tier suppliers may be able to sell to SAIC offers some glimmer of hope to those companies hit hard by the MG Rover demise.

"It is not completely clear, but there is talk of production starting as soon as the end of this year."

Mr Blackett added: "It seems the Chinese never really wanted Longbridge. They bought the designs for the Rover 75 and 25, but they didn't want 5,000 Brummies.

"Now they will be able to buy the parts on the cheap because the suppliers have got nowhere else to go. It looks like the Chinese have played a very shrewd game."

The development came as it emerged MG Rover lost £250 million last year compared with a loss of £92.6 million in 2003, the last published accounts. The details were included in information packs sent to would-be buyers of the company's assets.

Originally, about 70 potential bidders had contacted the administrators PricewaterhouseCoopers, but that has now been whittled down to 40. It is understood SAIC, and other companies, have approached PwC about the possibility of buying equipment from the Longbridge production lines.

The scale of MG Rover's losses threw into doubt claims by John Towers, the company's chairman, that production could still be maintained at Longbridge.

He insisted yesterday that a deal with the Chinese "could still come good", adding: "It is not dead."

But Julie Kirkbride, the Conservative parliamentary candidate for the Bromsgrove constituency, which includes part of the Longbridge factory, said: "That the Rover brand will now be badged and made in China is a very bitter pill for the workers to swallow, especially when they took such pride in the cars being manufactured in the Midlands."

Ms Kirkbride blamed the directors of MG Rover, who sold the intellectual property rights for the Rover 75, 25 and K Series engine to SAIC for £67 million last year.

The Rover name, which is owned by BMW and was licensed to the company, was sub licensed to SAIC under the same agreement.

She said: "Once the Chinese had been sold the intellectual property rights to the cars, the directors of MG Rover gave away their principal bargaining chip."
 

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Discussion Starter · #89 ·
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.
 

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Discussion Starter · #104 ·
from the birmingham post

TVR tsar may be in line for MG deal

Apr 28 2005

By John Revill, Manufacturing Editor



The Russian billionaire who bought British sports carmaker TVR is considering a bid for parts of MG Rover.

Nikolai Smolensky has already visited the Longbridge factory to inspect the production facilities for the MGF two-seater sports car.

The oligarch, who bought the Blackpool-based TVR last July, is one of the 60 interested parties who have so far come forward.

Alchemy Partners, who were rebuffed in a bid to buy MG Rover in 2000, are also thought to be looking to revive their plan to run the company as a niche sports car manufacturer.

Other parties interested in bits of the business include Iranian state carmaker Khodro, and Rover's former partner Honda. But last night TVR remained tightlipped about a possible bid.

A spokesman said: "We wish the employees of MG Rover the very best and hope someone rescues it. We are only a small company with 400 workers. To my knowledge there has been no interest from us."

Rob Hunt, joint administrator, said there had been a lot of interest in the assets of MG Rover. "Around 300 people have been in touch with us asking for information about MG Rover, and about 60 of those are interested in buying parts of the company and running them as businesses," he said. "TVR are the type of people I would expect to see."

Meanwhile Chancellor Gordon Brown visited the Midlands yesterday to see efforts being made to provide financial help and employment support to workers and apprentices affected by redundancies at Longbridge.

Visiting North East Worcestershire College in Redditch he said: "We will continue to do everything we can to help the staff, families and the suppliers affected by the collapse of Rover, including the young apprentices."
 
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