08 April 2005
08 April 2005
The blighted British car manufacturer, MG Rover, is heading towards administration following the collapse of negotiations with potential investor Shanghai Automotive Industry Corp (SAIC) which was hoped to have secured the companies future.
Earlier this week 100 year old MG Rover called on the Government to make a decision on a bridging loan which would have opened the way to the car maker completing complex negotiations with the Chinese company SAIC. The loan was regarded by MG Rover as “crucial if the partnership is to be established”.
Peter Beale, PVH vice chairman commented: "We requested the bridging loan from the Government to provide the additional time needed to complete our partnership with SAIC. The PVH directors will provide £10 million of personal money to convince the Government of our commitment. What we need now is the Government to decide.
"Speculation about the ability of MG Rover to survive will continue to mount as long as the decision on the loan is delayed. The speculation has affected the confidence of our suppliers and dealers and time is clearly running out."
It now appears that time has ran out from the company with the Trade and Industry Secretary, Patricia Hewitt appearing on today's BBC Radio 4 station to confirm the severity of the situation, and clarify some confusion over whether the company was already actually in receivership.
This morning the official comment from Rover was that “The Board of MG Rover has asked PWC to accept engagement to advise the board of directors on the current position of the company. The management is committed to work closely with the trade unions, the Department of Trade and Industry and the many West Midlands agencies who can provide support. This is a deeply worrying time for everyone and our thoughts are with them and their families. We thank everyone for their loyalty and commitment at this very trying time.”
MG Rovers plant in Longbridge in the West Midlands currently employs 6000 workers although no statement on their future was available today (Friday). It was assumed that the 40 million (GBP) bridge loan which was being offered to MG Rover as a support package which was also designed to sustain Rover’s supply chain in the area.
The Press Association reported that the workers left the car company's Longbridge plant in Birmingham at lunchtime at the end of their normal Friday shift and were told to return for duty on Monday. The owners of MG Rover, Phoenix Venture Holdings, issued a brief statement which read: "The board of directors has met with PricewaterhouseCoopers this morning. The directors are taking the necessary steps to appoint administrators from PWC for MG Rover Group and Powertrain.
"Following the completion of these formalities, the administrators will issue a statement and press release later today. All employees are asked to come to work normally on Monday."
MG Rover has produced some of Britain’s most iconic production vehicles such as the mini, but since it was sold to BMW in the 1990's and following its return to British ownership in 2000, the Rover became the last UK owned volume car maker.