Era ends as MG Rover collapses

[Roberto_145]

Era ends as MG Rover collapses

Last major British-owned carmaker sinks into bankruptcy after it fails to make deal with Chinese

By Matt Falloon / Reuters

LONGBRIDGE, England - MG Rover, the last major British-owned carmaker, slithered into administration on Friday to the embarrassment of Prime Minister Tony Blair's government as it seeks re-election on its economic credentials.

The 100-year-old carmaker, which once made the iconic Mini and the Land Rover, had hoped China's Shanghai Automotive Industry Corp. (SAIC) would step in and invest in the company, allowing it to continue production.

But failure to secure a deal with SAIC forced the collapse of the company, putting 6,000 jobs at risk at its Longbridge plant near Britain's second city Birmingham. Another 15,000 jobs could be affected at suppliers.

MG Rover workers were downcast as they emerged from a meeting with trade union representatives, who spelled out the company's redundancy terms.

"They've told us to turn up on Monday," said 43-year-old Ashley Wilkes, who has worked at Longbridge for 18 years. "They've just told us we're entitled to 280 pounds ($524) for each year's service, up to the maximum of 12 years.

"It feels terrible."

Shortly afterwards, MG Rover confirmed it had appointed accountancy firm PwC to act as administrators.

Rover's plight could hardly have come at a worse time for Blair's ruling Labour Party, campaigning hard on the back of its economic record ahead of an election on May 5.

"It's appalling timing for the government," said Colin Hay, political analyst at Birmingham University. "But there is an element that the writing was on the wall for a time and the question is how much people will blame the government."

Trade and Industry Secretary Patricia Hewitt, conscious that Longbridge lies close to three constituencies where Labour has only a slim majority, said the government would do all it could to help workers at the plant.

She also announced a 40 million pound ($75 million) support package for Rover's suppliers, based throughout the region.

The opposition Conservative Party described the government's handling of the issue as "a shambles", but the Confederation of British Industry, a leading employers' group, said Blair's administration was not to blame and applauded it for refusing to prop up "unviable companies" with state aid.

St. Modwen Properties Plc, the company which owns most of Longbridge, said it appeared certain the site would be turned into something other than a car plant.

A British icon dating back to 1905, MG Rover has, in its various guises, produced some classic British cars alongside the mini, including the Morris Oxford, the Austin Seven, the MGB sports car and the cheap and cheerful Mini Metro.

Rover was sold to Germany's BMW AG in the 1990s -- when the German media dubbed it "The English Patient" due to its poor financial health -- but returned to British ownership when BMW sold it to holding company Phoenix four years ago.

It has struggled since then, however, and many say it was always likely to fail.

Trade union representative Tony Woodley said he still hoped the deal with SAIC could be resurrected.

"There's a clear business logic here for Shanghai Automotive to purchase the company," he told a news conference. "It doesn't mean it's the endgame today."

But industry analysts said SAIC was more likely to wait until MG Rover went into administration before moving in to cherry-pick those parts of the company it wants.


Additional reporting by Michael Smith, Gerard Wynn and Dan Lalor


http://www.detnews.com/2005/autosins...uto-144401.htm

[tama z71]

so what happens to mini and land rover? buyouts?

[RWD60]

Originally Posted by tama z71

so what happens to mini and land rover? buyouts?

mini and LR were bought by BMW back in the 90's... LR has since been sold to Ford.

[69nova]

Outside of seeing Land Rovers chase Gazelles around in Africa, I have had no particular interest in them. A high priced vehicle that is matched by many under priced competitors.
A company being sold to a receiver company is as good as a trip to the undertaker.

[Bravada]

I had the opportunity to actually test what LRs can do that most "SUVs" can't. They are off-roaders, not SUVs, and it just shows. Besides, in Poland at least, Land Rovers are quite cheapish and undercut almost all competitors on price (except for Koreans, if they can be deemed competitors). I find the new Disco and Range much more refinded than the Japanese or Jeeps PLUS they are cheaper!

Anyway, it's not about LR, which is doing very well now under PAG, it's about MG Rover, which was on its way to its grand revival and got run down almost totally due to almost unbelievable mismanagement. There's nothing left with the company now, sadly - BTW Rover's Gaydon design and development centre (sold to Ford by BMW) is now doing the new great LR range plus the new Jags.

[jro4566]

Maybe Ford should buy them and add them to PAG. The Poll/Thread I made in the General Car Discussion shows that most members here at GMI who voted think that FoMoCo is doing better with new car launches. FoMoCo reinvigorated Volvo, then Land Rover and Aston Martin, and now Lincoln and Jaguar.



With 320HP and 385HP, this could be a good competitor to the GTO for FoMoCo...

[Hudson]

The MG pictured would cost much more than a GTO to build, even in volume. It's based on the deTomaso/Qvale Mangusta and was designed to be produced in very limited volumes.

MG Rover offers very little to anyone. Even though I'm a fan of British marques, I believe that MG Rover offers little more than access to the MG name. PAG/Ford should stay far away from MG Rover, unless buying something there allows Ford to aquire full rights to the "Rover" part of Land Rover. I'd love to see MG return to its former glory, but I can't imagine anyone really doing it.

[AdmiralViscen]

That car is ugly.

Ford should be adding Lincoln to PAG, not bringing in more foreign companies. Especially not failing ones.

[surferdude00711]

Originally Posted by AdmiralViscen

That car is ugly.

Dittototototo.

[Bravada]

MG/Rover would be of little use to FoMoCo, as they have got a very handsome portfolio at the moment - I guess the best portfolio in the market, nothing to add, nothing to substract.

MG/Rover might have been of some use to Honda, Renault-Nissan or Toyota, as they might use additional heritage/luxury and heritage/sporting brands. It would have even made sense to use MG/Rover as a vehicle for introducing Infiniti or Acura models to Europe. Anyway, now the Rover brand is almost unrecoverable, as it seems to have switched from "promising" to "afloat", which means "dead" for such a brand (and I admit it sadly as an ardent Rover fan). The MG brand still has more potential, but it would take quite a lot of money to put it back on all fours with a really competitive model lineup - or perhaps it's bound to be another Lotus or TVR.

I think Hudson was just right and I'm just repeating his words. No other way to express my tremendous grief, I guess...

[TomND]

Originally Posted by AdmiralViscen

Ford should be adding Lincoln to PAG, not bringing in more foreign companies.

I thought Lincoln was in PAG for a while, then Ford pulled it back out? I'm probably just confused, though.

[alfetta]

This is the brand GM should have bought back in the eighties and not Saab.
You wouldn't believe the amount of sophistication Rovers had in the sixties. The company was very healthy and offered amazing engineering but it went ashtray under British Leyland.
Offering comfort, safety and a gutsy V8 which had its roots from a discarded Buick block.
What a lovely noise that thing made. Gnarly, strung-out attitude but never intrusive.
But slappig chrome grilles and walnut fillets on bland euroboxes to feign luxury wasn't enough
when Honda took over.
The once proud marque badge was fitted onto a Honda. Just a luxury Honda but not a Rover. There is no substitute for the real thing.

It all went horribly wrong thanks to BL only catering for economy cars and neglecting exclusive
brands like Rover, Jaguar and Triumph. And the unions and strikes offcourse.

I allways felt an American company would have understand the core of making a British car
British. The recent 75 finally got a V8 and RWD. The same line of principles.
The sportscar could be delivered with a factory optioned Nitro kit offering 1000 bhp!!!


Why GM bought Saab I will never no. British marques like Rover should have suited GM very well. A comfortable V8 powered motorcar. If you drive them slow you would feel regal but
it still had a bullish demeanor-they rock! The kind of car GM should have known how to make and could share technology with.

[syr74]

If the Rbitish gvot made the buy attractive enough I think a Ford purchase of GM Rover could be very lucrative for everyone involved. It would give Jaguar a way to spread around it's motor and possibly some less expensive platforms without sharing with Ford itself. I don;t think Jag enthusiasts would mind a upmarket MG Rover that uses a Jag motor nearly as much as a Jag that shares a motor with the parent company Ford. In the former Jag gets to be the "supplier" and in the latter they are just taking hand-me-downs.

This is but one of many possible advanatages IMHO. But, the powers that be in the Empire are going to have to help out a bit and I don't see it happening.

[ChevroletRevived]

This is sad..I liek MG-R..bu if you go to forums.mg-rover.org, there is talk of a management/company workers buyout.

[griswold44]

ugh I hate Land Rover. I would take a Toyota Land Cruiser over a Range Rover anyday.