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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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I will be saddend and angry if Rover is effectively closed down and the factories sold off to China anyway, at a fraction of the current negotiated investment. This country does design and produce some of the best manufactured goods in the world, and it pisses me off when anything made here is joked at or labelled as being inferior. You hear it when a disaster happens abroad and the U.K. media mentions it was probbably the British part that failed.
Rover needs to scale back, keep the best employees, and a smaller modern factory, with the investment from China's SAIC. By the way how many are employed by Mini, who make more cars than Rover.
I have just seen a disturbing news flash saying Rover is in receivership. Rover has to be sustained.
Just on the Ten, Rover is in receivership.
RIP Rover, it's been on the cards for months, even years. The loss will be bad for the West Mids economy but nowhere near as devastating as if it had happened ten years ago.
Good news for Labour I suppose, the last thing people want now is a party that would not spend a penny of taxpayers money to build up a nationally important strategic industry.

Couldn't come at a better time for Rover - political parties have to say if they support its future or not.

Towers and his colleagues will, I hope, be asked to pay back the ridiculous salaries they took out of a business they have seen through to bankruptcy.

This country will not live on taking in its own washing, or in shopping, and we need to draw a line in the sand now. Rover has to be saved and rebuilt as a viable company.
seems like my last post has been the kiss of death. very bad news
No, the £100m would be better spent on retraining the workforce than throwing our money away to keep Rover going for a couple of months.

We don't have to have a large manufacturing sector at all. Most of the worlds leading economies are scaling back their manufacturing.

Rover made some good cars it's true, the 75 and the MGs especially but the range was just too oldand they didn't have the investment funds available to bring out new models. The 25 and 45 were hopelessly outdated.
liverpolitan said:
Good news for Labour I suppose, the last thing people want now is a party that would not spend a penny of taxpayers money to build up a nationally important strategic industry.

Couldn't come at a better time for Rover - political parties have to say if they support its future or not.

Towers and his colleagues will, I hope, be asked to pay back the ridiculous salaries they took out of a business they have seen through to bankruptcy.

This country will not live on taking in its own washing, or in shopping, and we need to draw a line in the sand now. Rover has to be saved and rebuilt as a viable company.
Nonsense. We can design, manufacture and market high volume high technology goods, with global collaborators. Dyson does it. Rover can. The Chinese may get a good deal, financially, but we need to invest some taxpayers money in value-adding activities, and personally I don't care if Shanghai citizens (who own the Chinese company involved) get a better deal than some capitalists based in England on this deal. I want the company to be rebuilt as part of a successful entity.

We have enough people with an NVQ in saying "sorry, out of stock", we need to rebuild the craft and technical base of people who can make things. Manufacturing will be a part of our economic future, including mass manufacturing.
Jonesy55 said:
No, the £100m would be better spent on retraining the workforce than throwing our money away to keep Rover going for a couple of months.

We don't have to have a large manufacturing sector at all. Most of the worlds leading economies are scaling back their manufacturing.

Rover made some good cars it's true, the 75 and the MGs especially but the range was just too oldand they didn't have the investment funds available to bring out new models. The 25 and 45 were hopelessly outdated.
Even my dad is depressed at this news and that is a bad sign... trust me!

Fucking hell! Maybe all the Longbridge staff could find work in Tesco or... erm... Landscape Gardening and Cookery programmes are popular at the moment... or... err... the Bullring shoppin, naah... I suggest this is a good time to throw jeremey Clarkeson into Longbridge to evaluate the situation. ;)
MG Rover board have issued a press statement saying that they have appointed Price Waterhouse Cooper accountants to "advise the board on the current position of the company"; MG Rover is not in administration, yet, contrary to the DTI's announcement, earlier.

It is desperately sad for Brum that in 2005 this famous marque would have celebrated its' 100 years @ Longbridge. Anyone who has driven an MG-XR will remember this very stylish and sporty new car as representing the new breed of MG.

Almost five years ago to the day,Alan JOhnson MP made a speech entitled "The Future of the Motor Car Industry". http://www.dti.gov.uk/ministers/archived/johnson110400.html
"The Government will do what it can to help industry tackle these challenges as part of our determination to ensure that there will continue to be a thriving car industry in the United Kingdom. "

I only hoped then he meant a BRITISH car industry..
I remember people saying very similar things to you during the miner's strike, "how can we go on destroying our industry", "we must draw a line now", "the government needs to spend money saving these jobs or there will be no jobs left". Twenty years later there is no mining industry to speak of in the UK and we are a healthier and more prosperous nation.

It's not as if MG Rover is a very important manufacturer anyway, they only make 3% of all cars built in the UK. We have a successful car industry why spend good money propping up the unsuccessful part?
liverpolitan said:
Nonsense. We can design, manufacture and market high volume high technology goods, with global collaborators. Dyson does it. Rover can. The Chinese may get a good deal, financially, but we need to invest some taxpayers money in value-adding activities, and personally I don't care if Shanghai citizens (who own the Chinese company involved) get a better deal than some capitalists based in England on this deal. I want the company to be rebuilt as part of a successful entity.

We have enough people with an NVQ in saying "sorry, out of stock", we need to rebuild the craft and technical base of people who can make things. Manufacturing will be a part of our economic future, including mass manufacturing.
95% of the benefits of having a car industry stem from the jobs (including at suppliers) and tax revenue it provides. For this it doesn't matter who owns it.

And anyway, if you have a pension fund it will probably invest in US, European and Japanese stocks so a portion of these 'foreign' companies will be owned by British individuals and institutions anyway.

It's a total waste of money trying to keep an industry "British" just to bolster national pride.
Forward said:
"The Government will do what it can to help industry tackle these challenges as part of our determination to ensure that there will continue to be a thriving car industry in the United Kingdom. "

I only hoped then he meant a BRITISH car industry..
On the subject of suppliers; this is from the BBC:

from
http://news.bbc.co.uk/1/hi/business/4423181.stm

Rover suppliers offered £40m aid

A £40m support package has been put in place for firms that supply MG Rover, the UK trade secretary has said.

The announcement was made as MG Rover's 6,000 workers wait to find out if the stricken UK car maker can survive.

The firm called in advisers on Thursday amid reports it was on the verge of collapse after talks with a possible Chinese investor broke down.

With parts suppliers pulling credit and production stopped, industry analysts say its demise may be inevitable.

"I think it's a given that there will be some form of insolvency proceedings," Ian Gould, corporate recovery specialist at PKN told the BBC.

Trade and Industry Secretary Patricia Hewitt is due at Rover's plant in Birmingham on Friday morning.

She told the BBC that the government had made the £40m support package available to Rover's suppliers in an effort to help them "find new business and secure their future".

She also pledged to do "absolutely everything I can" to help Rover's workers and other jobs in the area reliant on the company's business.

The fate of the firm, supported by successive governments, looks likely to become an election issue, say correspondents.

Premature?

Ms Hewitt was the first on Thursday evening to suggest the firm had called in administrators or receivers.

Union leaders said they had been told the same thing by Rover's management.

But late on Thursday night, MG Rover told the BBC's business editor Jeff Randall that it was not in administration and that Ms Hewitt's statement had been premature.

It said it had simply invited accountants PricewaterhouseCooper to advise on its position.

The government has been in intensive talks with both Rover and potential investor Shanghai Automotive Industry Corp to try to secure the firm's future.

A bridging loan was on offer, but only for a year and a limited sum - whereas Shanghai Automotive would complete the rescue only if Rover's solvency was guaranteed for two years.

Early on Friday John Towers, the chairman of Phoenix Venture Holdings - the consortium that bought MG Rover from BMW for £10 in 2000 - left Shanghai after the talks broke down, to return to London.

Production halt

The day before, Rover had had to cease production as the supply of parts dried up.

"Our credit terms have been taken away from us since the press (coverage) on Tuesday," said Peter Beale, Phoenix's deputy chairman.

"The implications are devastating. We cannot survive this."

The company's apparently impending doom led to calls for support for its workforce.

"Yet again I'm having to write an obituary for another stalwart of the British engineering and manufacturing industry," said Tony Murphy, Amicus national officer for the automotive industry.

"Longbridge and the whole of the West Midlands are becoming ghost towns."
A buyer will probably be found for MG who will carry on as a niche sports car manufacturer owned by one of the big groups but the Rover brand is probably dead.
Rover's been in turmoil for years - when BMW sold them off to Phoenix, the Rover 25 was the best selling car of that month (sympathy buying I suppose)

My friend bought a used Rover 25 yesterday and its a nice car, except for the ghastly indicator stalk that must be from a mini metro. But compared to a focus, astra, fiesta or corsa - its behind the times big style.

Its a shame because their cars remain good looking, even 10 years into their life.

I just hope the MG part can be saved, i'm pretty sure this was what has been propping the dead horse up lately...
I bought a second-hand N reg Rover 414si last month, my first, and it drives like a dream, with a lovely comfortable interior. Apart from the fact I feel I should wear gloves and a hat when driving it, it really is a class car. That's the crunch - Rovers are for middle-class, white collars and not for young flashy go-getters.
The best thing BL / Rover ever did in my lifetime was launching the MiniMetro. I can still remember waiting for the bus on the way to school in 1980, and seeing hundreds upon hundreds of Metros driving down the Bristol Road - didn't know what it was, either an ad campaign or test driving, but they were pretty forward looking cars at the time. Rover lost their way by not launching another small car.
looks like the end of Rover:-(
Do you think that this is what the Chineese actually wanted as they can now buy the bits of the company that they want from the receivers (name, engine plant etc) without having to worry about the staff or closing the factory.........
Where is Advantage West Midlands?

We would be suffering full page "boast" adverts from them if the deal had gone through (paid for by the taxpayer).

Where are they now? Issueing press releases like this:

http://www.advantagewm.co.uk/mg-rover-news-release-8-april-2005.doc

They are shameless in being an arm of DTI in Victoria Street, now effectively trying to shut out hope for Rover. There is not a single word of hope, not a single word about trying to save the company. Nothing, just using DTI monies to temporarily support suppliers. Disgraceful.

Where is the Regional Development Agency for the West Midlands? An agency that would fight to save one of the major employers of its region? It doesn't exist. There is a just a branch office of the DTI with a fondness for placing adverts with the words "world class" in them.
as a former employee , i feel im probably more qualified than most to comment, it is a sad day for brum but the fact is people are not going to buy models that are now effectivly 15 year old designs, mg have done the best they could tarting up the range, and the 75 remains one of the best cars in its class, but with out a new model as planned for last year, the company never had a chance, the deal with the chinese needed to happen 2 years ago really, whos to blame? well bmw really, they made a right **** up when in charge, bumping up the prices to make em more exclusive, stopping the metro with out a replacement, fuddy duddy styling and a bizarre fear of the 75 actually out doing its own models.
i cant help but think, if they'd done what mg did with the range they invested, and with the success of the mini, and new range rover models, and the new rover (bmw 1 series people!) the company would be in a very different situation now!
all i can say is good luck to those that are there now.
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