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Annie Hayes

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No more mileage for MG Rover workers

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Car manufacturer, MG Rover put the brakes on production last night following a failed rescue attempt; up to 20,000 jobs in the West Midlands are in jeopardy.

Trade and Industry Secretary, Patricia Hewitt and Tony Woodley, leader of the Transport and General Workers Union announced that receivers were being sent in yesterday.

Hewitt said: “This is a devastating blow to all those involved – the workers and their families, the company’s suppliers and the wider community. Our thoughts are with them.”

The business has been fighting for its survival in recent years and a rescue deal with the Chinese manufacturer Shanghai Automotive Industry Corporation (SAIC) looked set to cement the future of the firm.

But the collapse of the deal caused many suppliers to refuse to deliver components for fear of not being paid. Production was then halted.

Hewitt said that the government “stood ready” to issue bridging finance of over £100m, but that “without a deal there was no possibility of a bridging loan.”

But there was conflicting information this morning as to whether the company had admitted itself to being on the brink of receivership. In a statement it said, “The Board of MG Rover has asked PricewaterhouseCoopers (PWC) to accept engagement to advise the board of directors on the current position of the company”, adding,

“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.”

It added that this is “a deeply worrying …and trying…time for everyone.”

Responding to the news, Shadow Industry Secretary, Stephen O’Brien said:

“It is a tragedy for the 6,100 workers in the Longbridge factory and the thousands of others who work for MG Rover’s suppliers.

“We know very little about the details of the negotiations between SAIC, the DTI and MG Rover and so it is impossible for us to say anything on the loan negotiations. At this time our priority should be the men and women who have lost their livelihoods.”

In addition to the Longbridge jobs at least 12,000 work in components companies and the local economy.

One Response

  1. It is all part and parcel of
    It is all part and parcel of running a business when you have to deal with terminating of employees, halting of business operations, and experiencing huge losses. The state of the economy in general plays an important role as well in influencing the condition of your business on top of other major reasons. It might be just a phase that leads you to bigger success, but in the meantime you would have to simply handle the situation tactfully.

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