MG Rover
What happens next?
Rover 75
Last night Trade & Industry Secretary Patricia Hewitt was reported to have said that the company was already in administration. MG Rover denied this, stating that they were seeking advice from PricewaterhouseCooper. It's now been confirmed that both MG Rover and Powertrain Ltd are in administration which means that the administrators will attempt to keep the company running whilst a buyer is found.
Talks appear to have broken down with Shanghai Automotive, scuppering a deal that could have secured MG Rover's forseeable future.
Production stopped at the Longbridge plant when parts suppliers refused to supply more components with the implication being that credit lines were fully stretched. The Government has offered to prop up MG Rover to the tune of several tens of millions of pounds to enable production to restart.
Thousands of jobs are at risk both at MG Rover and down the production chain with component suppliers also at risk.
Whilst the company is privately owned, with so many jobs and communities at risk - and with a General Election imminent - it will become a subject of much political debate in the days to come.
For car enthusiasts, it's a sad chapter in the chequered history of the marques. The butt of jokes for decades, the company has turned itself around in recent years, increasing the desirability of its cars dramatically, thanks largely to some clever design changes on the existing model range.
The car business is an expensive business to be in however, and without large funds to draw upon for new model ranges, MG Rover's future has always been somewhat uncertain.
We can but wait and see what unfolds this time.
In fact, I wouldne be surprised if SAIC make a 'comeback' and buy the whole lot out af administration. This is a very common business technique - string along a company, pull out at last minute leaving no option but administration, then buy whole lot out of administration for pennies.
I would expect SAIC to wait for the receivers to get in the door and then buy the bits they want without any of the risk. I am guessing they will go for the 75 and 25 production line and probably the work done so far on the new 45 replacement. They'll bin Longbridge.
And it sounds like the Govt have given up hope - the money they had put aside for a bridging loan is now going to rescuing the suppliers who will get shafted by MGR's demise.
I wonder if anyone else will attempt to buy the TF?
The incredible thin is the govt would not release the bridging loan, which as a loan, they will get returned with interest but they will support the suppliers with £40m and give them a £25m vat break. They will have to support the redundant longbridge workers. Hundreds of millions of pounds to throw away but a loan to help a company that wont cost us anything they refuse. Now we will have thausands of workers without jobs and dignity.
Vote labour? NEVER
From the press, it appears that all hopes were on a deal with the Chinese, which is now not looking possible. Therefore game over until a new strategy emerges.
I agree with PH (as in secretary of state, not Ted) that the loan is not the way forward. However, it is adding further to the 1m plus manufacturing jobs that have gone since mr Liar took power
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