MG Rover on it's way out?

[Matt]

Supposedly some of their suppliers have stopped sending them parts because they believe the company is about to go bankrupt.

From www.thecarconnection.com - report 4/8/2005.

MG Rover Halts Production

MG Rover is temporarily halting production at its Longbridge plant in the British midlands because of supply problems. It is thought that some suppliers are not delivering to the company because they feel it could be on the brink of insolvency.

MG Rover has been trying to reach an agreement with Shanghai Automotive Industries Corporation of China since last year. The deal would give the cash-strapped British firm a lifeline in the form of a joint-venture that would see MG Rover contributing know-how and engineering skills in return for Chinese investment that would allow joint development of new models.

The deal was first discussed last year, but in the last couple of weeks SAIC has been backpedaling because it has doubts about MG Rover's solvency. The Chinese company has been insisting on assurance from Longbridge that the company has the financial reserves to see itself through the next two years, during which new models would be developed for production in both Britain and China and a return to profit could be foreseen.

The British government has become involved in the negotiations in recent weeks, with talk of a loan of almost $200 million but SAIC has held back in order to check the details of the deal and the possibilities of MG Rover being able to fulfill the conditions of the loan and repay it. A stumbling block to this plan is that SAIC wants the loan to run for two years, but European Community regulations say government loans should be for a maximum of six months.

The bad press that the stalled negotiations has brought about has had a negative effect on MG Rover's image and sales, which have been steadily eroding and fell by 17 percent in the U.K. during March.

The Longbridge plant employs some 6000 workers, but up to 20,000 jobs in the area surrounding the plant and further afield are said to rely on MG Rover. None of the Longbridge workers have been sent home, but the new development adds even more to the uncertainty that has dogged the company since it was sold to the current owners by BMW for the token sum of £10 ($19) some four years ago.

One of the problems confronting the company is that when BMW handed over the business, it also provided a loan of almost a billion dollars at today's exchange rate. This will have to be repaid if MG Rover fails, and it is adding to the general air of gloom that is building up around Britain's only nationally-owned volume carmaker. The biggest fear, however, is that SAIC is not really interested in saving the British firm but is waiting for it to fail and then to cherry-pick what it wants in a fire sale. It's a sad situation for the Longbridge plant, which celebrates its centenary this year and at one time proudly advertised itself as the largest self-contained car plant in Britain. -Ian Norris

[pimento]

That's really quite sad, I'd have loved to see MG Rover grow up to challenge Jaguar for British Luxury, especially since Jag isn't British owned anymore.

[crisis]

I think it was all over for Rover when this writing was scribbled on the wall.

[henk4]

now we may mourn all this but is there anybody on UCP that would buy a current rover model and if so which one and why?

[Spastik_Roach]

How dare they destroy the Rover V8! They deserve this.






Please, I was joking, stay, STAY, STAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAY PLEASE!

[Spastik_Roach]

MG Rover contributing know-how and engineering skills

*coughs*

[crisis]

Originally Posted by Spastik_Roach

*coughs*

The report I heard this morning on the radio suggested the Chinese company withdrew and were going to wait for Rover to disappear up its own arse and then come in and collect the pieces. Stinkin Commies.

[henk4]

Originally Posted by crisis

The report I heard this morning on the radio suggested the Chinese company withdrew and were going to wait for Rover to disappear up its own arse and then come in and collect the pieces. Stinkin Commies.

Apparently they got versed very well to using old capitalist tricks

[jorismo]

It's a shame if they go down, they make some nice cars. Let's also hope they will still join the Deutsche Tourwagen Masters (DTM). I love that racing class...

[pimento]

I'd have an MG 260 ZT, just to be different. And according to JC (anyone else notice the similarity in the initials to a certain religious icon?) it's a lot of fun to drive. I'd much rather them survive, have some money and develop it further with a BMW V8 though.

[Wouter Melissen]

Originally Posted by pimento

(anyone else notice the similarity in the initials to a certain religious icon?)

Pulp's Jarvis Cocker?

Or has he put it in his song 'Dishes' from the 'This is Hardcore' album:

I am not Jesus though I have the same initials
I am the man who stays home and does the dishes

[Coventrysucks]

They have gone into administration.

It is entirely the fault of the management at Rover: BMW gave them a good deal expecting them to do well and repay the loans etc, but it was a complete hash-job.

All of the other car companies which have a lot of input from overseas at a high level do well - Nissan's Sunderland plant is Nissan's most efficient factory.

That's another 30,000 odd jobs gone then, to accompany the ones lost from the closure of Jaguar's Browns Lane assembly plant, and the loss of jobs at Peugeot's Ryton plant.

[Coventrysucks]

It also turns out that Trade and Industry Secretary, Patricia Hewitt decided to announce that they had gone into administration before they decided that was the best option.

"The directors’ strategy for Longbridge was thrown into confusion last night when Patricia Hewitt, the Trade and Industry Secretary, announced the company had been put into receivership, while the consortium confirmed only that it had asked PWC to advise on options." - Times

Needless to say - both management and employees were rather surprised and annoyed.

Should members of the government be announcing to the media that your company is in administration when it isn't?

Vote Conservative - at least their idiocy isn't proven!

[Matra et Alpine]

They should sue - maybe put a stop to Labour spin-doctoring once and for all.
They clearly would NOT want this dragging on through the current election or worse hitting the fan a few days before polling day, now that've a month for it to get forgotten about !!

[johnnynumfiv]

If I was in england, I'd probably have a few new MG's and rovers, and old ones . Its sad to hear that they are going bust once again