Workers at ailing car manufacturer, MG Rover were sent home yesterday on full pay as the chances of securing a deal to save the business were said to be as little as a ‘million to one’ by the unions.
A last minute emergency government loan of £6.5 million has been drafted in to buy some time.
PWC (the appointed administrators) partner Ian Powell described the funding as ‘vital breathing space but said that viewed in context’ it represented ‘a small step forward.’
At a press conference, PWC said that they were “hopeful” of “securing an audience” with the Chinese car manufacturing firm, Shanghai Automotive Industry Corporation who recently pulled out of a rescue deal, to see whether it was interested in Rover despite its changed circumstances. But PWC partner Tony Lomas warned there would be no miracle cure: “It’s a really complex deal to put together and it will take some time.” In fact, it seems it may not be on the table at all.
On BBC Radio 4’s Today programme yesterday Jon Moulton of Alchemy Partners said that Alchemy was still interested in running Rover as a niche manufacturer of MG sports cars. This was the basis of Alchemy’s strategy when BMW opted to sell Rover to Phoenix.
Moulton said he had talked to a PWC administrator at Rover, but continued: “He wished he knew what he was selling and I wished I knew what he had to sell.”
Moulton had low expectations from the discussions because he was unsure as to what assets and intellectual property the company still retained: “We don’t know if Rover can pay the rent on its buildings.”
At the end of last week, Trade and Industry Secretary Patricia Hewitt together with Toney Woodley, leader of the Transport and General Workers union announced that receivers were being sent in but some confusion ensued as to the actual position as a spokesperson for MG Rover declared the announcement as ‘premature’.
A number of commentators have noted that in the run up to the election, the government would be particularly anxious to see a relatively painless solution to Rover’s situation. Such a fix is looking increasingly unlikely.
