Friday 8th April 2005

MG Rover

What happens next?

---

Rover 75

Confusion reigns this morning as MG Rover struggles for survival once again.

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.

[Fire99]

Opinion on this (as always) is divided..
Some say its just another commercial company that either makes profit and survives or folds..

Others pass alot of blame to the Phoenix believing them to have asset stripped the company and put personal fortunes ahead of the success of the company.

Others Believe the marqué has greater signficance than just 'another company'..

Personally i feel MG and Rover are a significant part of our countries Heritage. Its factory has been producing cars for over 100 years. It has great history.. Good and Bad!

In the past 25 years or so it has been in the 'wars' so to speak and has always been a struggle..

There was good and bad regarding the BMW deal. My gut feeling is that BMW are a very focused and potentially ruthless Company with no interest in the heritage of a British Car Manufacturer.. They either fitted into another market share for BMW or they didnt. Ultimately MG Rover didnt fit into that vision..

Since Phoenix took over, as a whole the brand has been turned around.. At one point i believe the MG ZR was the biggest selling hot hatch in the UK. The MG-ZT is a fine car with rare media popularity.

There have been mistakes. I feel the City-Rover was mistake as its price tag outweighed its abilities..

The SV? the jury's out..I think it needs to be finished better for the money but from what i remember any road tests have said it has huge ability and great potential. And the idea of having a Very low volume super GT is a good one for changing a companies profile.

The point i feel is that with Phoenix at the helm the company was a fledgeling again. It needed and still needs nurturing and a degree of faith and support from all parties.. Manufacturers/Suppliers, Government, Consumer and Press..

I cannot comment on the Manufacturers/Suppliers but i feel all the others have been less than supportive over this firm.

Since its the LAST british owned Mass Car producer left, its a decision everyone has to make. Do they accept its just another commercial company which should of made it (even against the odds!) and let it die Or do they believe in the Historical significance of the brand and have the foresight to see the long term loss that would be made to the UK should this 'national institution' disappear..

I for one believe the latter..

The UK needs to stand for more than just a supermarket of Non-British International companies...

MG Rover, for better or worse is one of the last threads of the UK actually having an identity in the Economic marketplace..

Dont let it go without a fight!!

[IPAddis]

Did they actually have any new cars in the later stages of design? If so, it's worth trying to save. If not, the investment required makes it unfeasible to save.

Ian A.

[Fire99]

The prototype 45 replacement was shown..
But i cant comment on what stage of design it is in.

Looked like a hotter New Astra when it was shown..

And purely on looks the New Astra doesnt look half bad for the market its in.

[daydreamer]

IPAddis said:

Did they actually have any new cars in the later stages of design? If so, it's worth trying to save. If not, the investment required makes it unfeasible to save. Ian A.

Aparently over £100m had been spent on the 45 replacement (not sure what £100m of development gets in the West Midlands these days though ). Also, the ZR and MGTF both top their respective sectors in the UK.

I think that the company has been all about survival since Phonix took over - and I don't think that the millions that have gone to that gang of four help perception either. Do real long term business plan has been realised, so I guess that this was inevitable.

The only way to rescue is to apply small company mentality to the group, which is an impossibilty. Until then though costs will always outweigh income

[Paula&Marcus]

Hi All,
I full agree with Fire99, dont let them go without fight !

The only thing you can do is buying their products !

IMHO the UK-motorists have to rethink .. just too many Mercs, BMWs, Japanese cars ... on your island-roads.

Cheers
Marcus (located in Germany but with British cars: MGA, Rover 25, MGF, MG ZT and Lotus Esprit)

PS: Seems not to be my fault when British car companies die.

>> Edited by Paula&Marcus on Friday 8th April 13:37

[RichardR]

This is a very sad day seeing MG Rover in this plight, but I feel very strongly that it's at least partly become of a victim of the British disease of kicking the underdog while they're down! The mainstream press has been on MGR's back for ages, critising every move they've made, and a large number of contributors to these forums also seem to have taken pleasure in repeatedly sniping at MGR.

I've always rooted for MG Rover, in much the same way that I've rooted for TVR, and I think it's tragic that our only remaining volume car manufacturer seems to be rapidly disappearing down the pan, whilst politicians simply take the opportunity to posture, at the same time trying to look sad and earnest.

I really hope that MG Rover finds a way out of this disaster, both for the sake of their own and their suppliers employees, and also for the sake of the country as a whole.

IPAddis said:

Did they actually have any new cars in the later stages of design?

There was a story in Auto Express recently relating to a new model in development to replace the 45/ZS:

[cdp]

I wonder if they had spent all their efforts on the 45 replacement instead of the £85,000 supercar whether they may have got it out sooner.

Even if the customers had done the final development it would have been better to go out with a bang.

[IPAddis]

Well if they have made an effort to replace the ageing 25 and 45, they should be rescued. The 75 looks (and sounds) great in MG ZT form.

I don't know why our Police forces are so unpatriotic either, surely an MG ZT would be a great cruiser. Would add stred cred to the brand, look what it did for the Volvo T5.

Ian.

[Fire99]

I agree about the Police thing and to be honest all public servants too!!

I know MGR is not a public company but i believe all people in public service should, within reason, be patriotic to our own brands..!!

But as ive said before, the current government is making it a crime to be patriotic..

As i say MG Rover is the LAST volume UK Car Manufacturer..

[top brake]

patience has gone with everyone i fear, they had the chance to turn things around but all they did was 'max power' their cars

or am i being too harsh?

[anonymous-user]

Fire99 said:

As i say MG Rover is the LAST volume UK Car Manufacturer..

Apart from Nissan, Honda, Peugeot, Ford, Vauxhall ...................................

[Fire99]

unrepentant said:

Fire99 said: As i say MG Rover is the LAST volume UK Car Manufacturer.. Apart from Nissan, Honda, Peugeot, Ford, Vauxhall ...................................

Oh blimey!! UK OWNED!!!!

[starry]

IMHO it is not acceptable for the Government to support any privately run organisation - regardless of the heritage - to the tune that is mentioned in the press.

It is difficult to justify spending the millions of pounds required on a brand that, outside of the MG makeover, has proven to be wholly unsuccesful.

When taking into consideration the investment made to the various Rover incarnations by UK Plc over the years (whether owned publicly or privately) this is about as good a case study for no further government intervention as you can get. See this comment from The Sunday Times:

"The government bail-out and Chinese takeover will cap a remarkable episode in the British car industry. MG Rover, the last relic of British Leyland, was bought by BAE Systems before being sold to Germany’s BMW. Despite hefty investment, BMW failed to make Rover bear fruit, and stunned ministers in 1999 by announcing it would pull out. After one buyout led by Alchemy collapsed, BMW sold Rover to Phoenix. "

Becoming a political issue does not mean that the Government is justified in throwing what is, IMHO, good money after bad.

[anonymous-user]

Fire99 said:

unrepentant said: Fire99 said: As i say MG Rover is the LAST volume UK Car Manufacturer.. Apart from Nissan, Honda, Peugeot, Ford, Vauxhall ................................... Oh blimey!! UK OWNED!!!!

Why does ownership matter? Rover would have to have become Chinese to survive in any event. TVR is Russian owned but its bloody well British. Lotus, Jaguar, Bentley and Aston Martin also (not russian obviously).

The fact is we have a thriving car industry in Britain.

[johnclap]

I think Phoenix management did a good job with old designs, especially using the MG badge. Why wasn't a better sales volume possible? Maybe because many people wouldn't want to buy a car that might lose value if the manufacturer went under, and the volumes have looked difficult for a couple of years.

We have another British car company, with acknowledged flair and a good following - Noble. They show that it is possible to sell brave designs, and used prices are staying high for these supercars.

Who'll come along for the pickings at MG Rover? There are surely buyers for the brand names owned in that group. There must be at least seven - Standard, Triumph, Austin, Morris, Wolseley, Riley, Van den Plas, and there may be more.

What do you think?

[mikeatBB]

There is incredible lack of pride and experise in British Engineering management which was at it's worst in the key industries of vehicle manufacture. I have bought British for 40 of my 48 years as a driver at huge cost. Starting with BSA & Norton motorcycles that leaked oil from every joint, that had undersized main bearings. A separate company, also in Birmingham supplied bearing upgrade kits for all Nortons! The Austin Morris, highly innovative, range of rot boxes where radius arms siezed up, CV joints failed and the sills rotted, Jags & Rover 216 EFIs where even the door pillars rotted and the alarm systems & chipped carburation were full of bugs. Land Rovers that leaked oil from every joint but looked brilliant. Almost all these vehicles had the same defects throughout the millions that were produced UNTIL the Germans got their hands on the 'mini' and the japs began to build bikes. The aircraft industry was no different and we waited until the wings fell of the comet and then we threw the world lead away to the Yanks and we don't risk putting the wings on now!, we leave that to the French! Can you see Patricia Hewitt changing anything, she was practically smirking when she announced the closure in Parliamment ...... she thinks call centres are the real Industry!for the UK in the 21st century.

[anonymous-user]

johnclap said:

Who'll come along for the pickings at MG Rover? There are surely buyers for the brand names owned in that group. There must be at least seven - Standard, Triumph, Austin, Morris, Wolseley, Riley, Van den Plas, and there may be more. What do you think?

IIRC BMW retained most of the old BL brand names when they "sold" the company.

[mgv8]

The government have put 10M in to keep things ticking over for a few more weeks. Just before the voting day an agreement will be made. This will probable involve the government meeting any pension short fall. So it looks like they have saved the day at the last minute.

[ed]

Fire99 said:

I agree about the Police thing and to be honest all public servants too!! I know MGR is not a public company but i believe all people in public service should, within reason, be patriotic to our own brands..!! But as ive said before, the current government is making it a crime to be patriotic..

So the Police forces and politicians who use Range Rovers, Landies, Jags, Vauxhalls etc don't count then???

[RichardR]

The Sunday Times said:

Despite hefty investment, BMW failed to make Rover bear fruit, and stunned ministers in 1999 by announcing it would pull out. After one buyout led by Alchemy collapsed, BMW sold Rover to Phoenix.

But if BMW had developed the MINI brand under the Rover unmbrella rather than their own, I suspect that MGR's fortunes would've been very different today.

Cherry anyone?

And don't forget the Land Rover technology that someone at BMW slipped into their pocket before flogging that family jewel to Ford