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."
Well argued, give yourself a pat on the back!Elizabeth Kinoke said:another ****.
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."
That would be the Rover name - yes - but as part of the deal last year, BMW now licence the name to SAIC. MG is still owned by Phoenix.pricemazda said:I heard that BMW retained the trademark rights to the name.
blueboy said:i ve heard some crap over the years about how londgbridge was europes most inefficient car plant and all that, but most car plants only assemble the cars, at rover they used to not only do that but make the engines, grind the gears , stitch the seats etc, skills that are nt found at any other plant in the uk, in many ways rover resembles the plight of the city, dogged by its past and unable to shift an out dated reputation by the ignorance of the british public.
its not so much the fault of the current set up as those that went before them, dumping honda was a massive mistake, we could nt make enough of em when we were with them, bmw made terible mistakes, not eplacing the metro, uping the prices and dampning down the sportier end of the range, why? if they'd have done what mg did for the range, and with the mini, and new range rover coming on board, rover would be laughing now! the rover work force is as good as any in the world, you only have to look at the new mini and range rover for that,
at the end of the day i cant blame people for not wanting to buy a car thats effectivly 10- 15 year old design but given a new car things would have been different....
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.
Oh don't be so pathetic. Go and read up on the British car industry.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!!!
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.)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.
GM did the same to Daewoo.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.
First Kindly refer to my first post top of this page, thank you.MartinN said:Oh don't be so pathetic. Go and read up on the British car industry.