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878 Posts
Discussion Starter · #1 ·
Kind of says the opposite to the Grauniad stories that Atmos has posted - not sure which is correct:

Government loan could help Rover

About 6,000 are employed at Rover in Longbridge, Birmingham

Last Updated: Friday, 1 April, 2005, 21:25 GMT 22:25 UK

The government is offering a bridging loan to help MG Rover secure a deal with its Chinese partner and safeguard thousands of jobs.
UK trade officials have travelled to China for talks with the Shanghai Automotive Industrial Corporation (SAIC) to help clinch the deal.

The Department of Trade and Industry (DTI) would not say how much the government was prepared to offer.

The TGWU, representing workers at the Birmingham plant, welcomed the news.

It said the development would help the car manufacturer stay in business in Longbridge until the Chinese deal was completed.

Key battleground

The government has been under mounting pressure in recent weeks to help the partnership, which unions believe is the only way that the future of MG Rover will be secured.

A DTI spokeswoman said: "Throughout this process the government has done all it can to help support the joint venture between MG Rover and SAIC.

"A team of DTI officials is in China this weekend holding discussions with SAIC. We are also in touch with the Chinese government.

"If it appears that a commercial deal will be agreed both MG Rover and SAIC are aware that the government would consider the option of providing a bridging loan facility to that deal. No formal decision has been made."

The government was also considering a package of support and financial assistance for the workers, their families and local communities if the deal does not go ahead, the department added.

'Right move'

Tony Woodley, general secretary of the TGWU, said he welcomed the government's decision on a possible bridging loan.

"This is the right move for MG Rover, for the Midlands and for manufacturing industry as a whole," he said.

"It will help keep MG Rover in business until the Is are dotted and the Ts are crossed on the deal with Shanghai Automotive."

MG Rover employs about 6,000 workers at Longbridge, but thousands more rely on the company for their jobs, working in local service industries in the West Midlands.

The company was bought for £10 from German car maker BMW in 2000 by a consortium of West Midlands businessmen led by John Towers.

Talks between MG Rover and the Shanghai Automotive Company have been continuing since last year.


878 Posts
Discussion Starter · #4 ·
And there's more:


By Graeme Wilson Political Correspondent
528 words
2 April 2005

(c) 2005 Associated Newspapers. All rights reserved
LABOUR last night offered MG Rover a £100million bail-out in a last-ditch bid to clinch a takeover deal by China's biggest carmaker.

Downing Street offered the taxpayer-funded loan amid fears that the takeover is about to collapse.

If that happened, Rover would have to close, and the political fallout could mean Labour losing a number of marginal West Midlands seats in next month's General Election.

The MPs who could be in the firing line include Labour's Richard Burden, who is defending a majority of less than 8,000 in Birmingham Northfield, which includes Longbridge, where Rover is based.

Former minister Gisela Stuart has a majority of less than 4,700 in Edgbaston, and Stephen McCabe in Hall Green has a majority of just over 6,600.

But the decision to approve the loan immediately raised fears that Trade Secretary Patricia Hewitt is throwing good money after bad.

Leading officials from the Department of Trade and Industry have rushed to Shanghai for crunch talks with China's biggest car firm.

Earlier this week, the Chinese snubbed Miss Hewitt's plan to hold the talks in London.

There is increasing frustration in Whitehall at the lack of progress in talks with the stateowned Shanghai Automotive Industry Corporation, which

could invest £1billion in a 70 per cent stake in Rover.

The firm desperately needs the cash to develop new models and modernise its Longbridge plant.

Union leaders hope the deal will save at least half the 6,000 jobs at Rover - and thousands more at local suppliers.

But Rover itself has caused delays by failing to provide the Chinese with details of its finances until a few weeks ago.

If officials sent to China decide the plans are still alive, ministers will provide a bridging loan of more than £100million to keep Rover's head above water until a deal is concluded.

Officials insisted the loan would have to be repaid in full. And they said Rover's directors will have to 'share the risk' by personally contributing 'several million pounds'.

Despite these reassurances, there is a significant risk that Rover could go under before a deal is clinched - meaning the taxpayer would lose £100million. If the Chinese deal falls through, ministers say they will try to find new partners for Rover.

They are also preparing a massive aid package to help the region if it shuts.

Ministers have made a number of attempts to save Rover in recent months.

In February, Gordon Brown held talks on the takeover with the Chinese premier Wen Jiaobao in Beijing.

Afterwards, he unveiled a package of multi-million-pound tax breaks for Rover. There had been hopes that his offer would help to clinch a deal, but progress quickly ground to a halt.

Last night, the Conservatives' industry spokesman Stephen O'Brien said: 'Given all the previous arrangements which have fallen through, we support Gordon Brown's efforts to help broker a deal and secure thousands of jobs.

'However, any deal must give taxpayers value for money.'

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4,622 Posts
It's now one second to midnight...

It would seem the rumours last November that MGR would run out of cash in April were true and in turn the suppliers must be very close to demanding payment upfront. Some of the odd stories here about late deliveries due to missing parts may have a very different reason: MGR are over a barrel with some suppliers.

Also, is the CR going to be relaunched? Or is TATA witholding supplies until they are sure they are going to be paid?

It's not in SAIC's interests to take over a dead company but this seems to be typical oriental brinkmanship to wait until the last moment for the best deal...unless GM or FIAT have made a better offer (and don't rule out any third party involvement).

It's a pity that that the much improved showing of MGR products in the Auto Express survey is going to go unheard with all this going on.

I looked at a lovely ZT-T today which is firm favourite but I'm not going to take the plunge until the future is clear.
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