[MGROVERnut]

People let's get things in perspective. Personally I hope the David James bid FAILS! I want it to fail because his bid will result in a few TVR style MG's stuck together with cellotape rolling out of a massive factory which is too big for their needs. There's very little to suggest that he is committed to the volume production of cars, under either the Rover or MG brands.

The beauty of the Magma bid on the other hand is this. Magma will make Rover's and MG's. They will build MGR a new Gaydon, based in Longbridge! They are backed with Millions of pounds, they have one of the worlds best CEO's (Martin Leach). They are well connected (so Longbridge could make cars for other companies or Magma projects. The tie up with SAIC could make MG and Rover truly global brands and re-establish MG Rover as Premium car makers. Given the fact that Magma is British and will own the MG brand and lease the Rover brand from BMW, then why not back it? Let's keep it real people. This is almost a dream outcome for Longbridge, given everything else that has happened.

Finally why would SAIC pull out of Longbridge? SAIC need a European bridgehead. The only reason they pulled out of a deal with the P4 is because MGR were loosing 40 million a month. That would scare most people off wouldn't it?

 

[SteveChilds]

No, MGRoverNut, they pulled out because they knew if they did MGR would collapse and they could get what they wanted at a vastly cheaper price. Simple.

Make no mistake, any of the chinese bids will mean that production sooner rather than later would go to China. Fine, we may get a RnD building at Longbridge whilst the rest of it is turned into houseing and a tesco, but even then once the Chinese have learnt everything from the RnD staff, that too will go off to China.

 

[SFulcher]

If they manage to productionise RD60 and that proves to be a success in Europe then surely SAIC would continue to build the vehicle at Longbridge.

The trouble is that if it fails then all production would move to Shanghai.

 

[Guest]

Steve,


Remember that it is Ma8ma that are buying MG Rover with some of the backing money coming from SAIC. SAIC will not own any part of MG Rover or Powertrain.

 

[SFulcher]

The trouble is SAIC own the rights to most of the cars and the K series engines.

 

[Ann MG Writer]

Brum Post

Woodley under pressure as Rover battle intensifies Jul 16 2005




By John Duckers and John Revill


The heat turned on union leader Tony Woodley yesterday as the MG Rover bid battle became increasingly ferocious.

A Chinese consortium supported by Mr Woodley was likely to go "belly-up" within a few years - just like Phoenix, backers of one of the rival bidders claimed.

Mr Woodley, general secretary of the TGWU, has firmly aligned himself to Chinese group SAIC and former Ford of Europe boss Martin Leach.

His stance has provoked harsh criticism from those backing the claims of Project Kimber, the bid mounted by company troubleshooter David James and his Midlands team.

A source said: "I am sure his heart is in the right place but he ought to be looking after his members Ð not trying to be a businessman."

He acknowledged that SAIC manufactured a million vehicles a year in China, and was the country's biggest operator.

But he said it was done as part of joint ventures with Volkswagen and General Motors, with Germans and Americans effectively running the operations.

He said if Mr Woodley again turned power broker and SAIC emerged victorious "then my forecast is that 12 months before the next General Election it will go belly up again".

The SAIC plan was simply "not credible", insisted the source.

The source discounted the hopes of a second Chinese automaker Nanjing, which some believe is the favourite because it is said to have the funds upfront.

The Project Kimber team claim they are fully funded and have enough working capital, but are waiting to see if the Department of Trade and Industry is prepared to give the loan guarantee its investors are demanding.

The DTI is thought set to be working through the weekend examining documents associated with the bid.

But another source poured scorn on the claims, accusing the Project Kimber team of sour grapes.

He said: "David James' bid is dead in the water and the only way he can get out of the water is to diminish everyone else and say their plans are not going to work."

The Birmingham Post understands that under the SAIC bid there will be a shift of parts of the Longbridge business to the Far East, probably the Powertrain engine making facility.

Engines would be completed in China and then shipped back to the UK where production of the cars would take place.

A spokesman for the TGWU also dismissed the claims, saying there remained a business logic to a link between Rover and SAIC, while Mr Leach was a highly respected and able motor industry figure.

"SAIC are nobody's fools and although Tony Woodley is not a businessman, he is someone with decades of experience of the car industry and knows a good deal when he sees one.

"The SAIC-Magma offer is the best possible deal. The David James bid seems to be based on the Government giving money, which they are not going to do, and it's Tony Woodley's view that the Nanjing bid is more of a lift and shift operation.

"The SAIC and Magma offer is the best opportunity to revive production at Longbridge."

A source close to Nanjing maintained its bid was still the most financially sound offer, would keep the most jobs - 2,000 - and would retain research and development in the UK.

 

[Guest]

Why don't David James/Mosley/AAA team up with Ma8ma?

 

[genpk]

No, MGRoverNut, they pulled out because they knew if they did MGR would collapse and they could get what they wanted at a vastly cheaper price. Simple.

Make no mistake, any of the chinese bids will mean that production sooner rather than later would go to China. Fine, we may get a RnD building at Longbridge whilst the rest of it is turned into houseing and a tesco, but even then once the Chinese have learnt everything from the RnD staff, that too will go off to China.

Steve, I think you are spot on,when the dust has settled down about 12 - 24 months from now,after they have learned everything required,there will suddenly be a statement saying "it IS no longer financially viable to continue production or R&D in the UK" BUT they will have all the UK/EU contacts/dealers required on board and ready for delivery of the NEW range of MGR cars.
The only hope may be the use of the cost effective Chinese built engines which may lower the price of locally built products and intern raise sales,that is if production can resume before they grow impatient.

 

[Ian]

The trouble is SAIC own the rights to most of the cars and the K series engines.

Do they, you know that for a fact do you?

The simple answer is you don't really know - no-one knows apart from those in negotiations between PwC and SAIC. You are just going by what the press are saying, who in turn are going on what SAIC is saying. PwC state that SAIC haven't bought what they think they have bought.

 

[David Lee Newsham]

SAIC are not buying MG Rover, it is Magma headed by Martin Leach that is buying MG Rover, it will be Magma who will make the day to day decisions on how to run the business.

SAIC are providing some of the funds just the same as a bank would do but unlike the original joint venture SAIC won't have any say in the running of the business.

As far as the IP rights ownership debate, PwC backed up by lawyers have already stated that SAIC own the rights to build the 25, 75 and K Series in China only.

 

[MGCrazeee]

SAIC released a press statement via a letter through The Cardew Group on 14th July. (Keith scanned it in and posted it on this site but I can't seem to find it now, however I've just found it over on Jerry's site.)

It states that SAIC has signed a letter of intent for a strategic collaboration with Magma Holdings Ltd in relation to a proposed approach to the administrators of MGR and Powertrain. It said that Magma (Note:- Magma, NOT SAIC) intends to acquire all of the assets of MGR and Powertrain. In addition, Magma (Note again Magma, NOT SAIC) intends to form a new company to recommence production at Longbridge.

Unless I am being completely thick, I guess this means that Magma will purchase and own all the assets of MGR and Powertrain, not SAIC....

So where does SAIC fit into the picture?? My guess is that possibly some (but I bet only some and not all) of the funding for Magma to purchase MGR and Powertrain and get it up and running again will come from SAIC.

I guess what they really mean by "strategic collaboration with Magma Holdings Ltd" is this. SAIC and Magma's new company will form a new JV company to design, develop and manufacture cars and engines as per the original JV proposed before the MGR and Powertrain went into administration.......

 

[Big Blue]

Steve, I agree that massively lower production costs in China are going to be attractive to any business, but I’m not sure that you can look at the car industry in particular in the same way. When the joint venture first fell through, I really thought it would be a miracle if production ever re-started at Longbridge. I too thought about the costs involved, and that apart from the 75/ZT, most are quite old designs. However, people who want a small car are not too bothered about where it comes from, and as long as its cheap and reliable, then China is the place to produce. Before you all comment on quality, they can do it – Audi and B*Ws are both produced under licence there. The problem lies with the prestige end. People will just not buy a Chinese ‘prestige’ car, even if it is a carbon copy of a (gracefully) aging British design. I wouldn’t, nobody on this forum would, and even my wife, who is not particularly into her cars (but loves her 52 plate Rover 75 Club SE), would not buy it if it came from China. Small cars, including any small new Rovers will have to be made in cheap labour counties now, as this it their selling point. The Rover 75/ZT is the Jewel in the crown for SAIC, and the one they should be able to make the most money on. It simply will not sell in Europe, Australia etc if it is made in China. Hopefully Mr Leach realises that you don’t kill the goose that lays the golden egg, and though Britain will loose its small car production, it can remain a place for research and prestige manufacture where the margins between production and sales price are bigger.

 

[JohnSwitzer]

I think Mr. James would be better concetrating upon sorting out his own finances rather than running down other bids.

I'm no great fan of Tony Woodley. But to me it is a clear sign of desperation that anyone has to begin running down other people and other projects, especially when they are (largely) unaware of what it is that other party has to offer.

John

 

[xerif]

I think Mr. James would be better concetrating upon sorting out his own finances rather than running down other bids.

I'm no great fan of Tony Woodley. But to me it is a clear sign of desperation that anyone has to begin running down other people and other projects, especially when they are (largely) unaware of what it is that other party has to offer.

John

I'd agree with that. There has been a recurring story throughout this saga in which bidders closed out or running into problems go public with claims that their bid is the best. Seems utterly pointless because PwC have a set of critera to objectively assess the bids and will not be swayed by who shouts the most.

The fact that the James consortia need a Govt loan to cover themselves suggests that of the three serious bids, its the most likely to go bust because there is apparantly no manufacturer in the background I would be very surprised if James is given the loan, the political risks far outweigh the gains for the Govt.

 

[JohnSwitzer]

Small cars, including any small new Rovers will have to be made in cheap labour counties now, as this it their selling point.

I'm sorry, but that is complete and utter clap trap. A typical MG or Rover sold in the UK, probably had no more than £300 of labour in it.

Shift production to China and that figure would probably fall to £60 and cost to market (i.e. transport) would increase by c.£250... so in essence there is no huge saving. Then there are the additional costs such as stockholding and increased lead and delivery times... and before you know it, the Chinese car costs more than the UK built car.

Offshore production can work for volume, low cost, commodity items. But cars aren't low cost and they're certainly not low cost and definitely not easily transportable.

John

 

[JohnSwitzer]

The fact that the James consortia need a Govt loan to cover themselves suggests that of the three serious bids, its the most likely to go bust because there is apparantly no manufacturer in the background I would be very surprised if James is given the loan, the political risks far outweigh the gains for the Govt.

Well, we do not even have confirmation that there is an actual bid from James on the table at the moment. Additionally, under EU rules if HM Government were to offer a loan to Mr. James - they would be required to offer it to any other EU based bidder as well, including Magma and Triple A.

Regards

John

 

[RolandRat]

I think Mr. James would be better concetrating upon sorting out his own finances rather than running down other bids.

I'm no great fan of Tony Woodley. But to me it is a clear sign of desperation that anyone has to begin running down other people and other projects, especially when they are (largely) unaware of what it is that other party has to offer.

John

He's only doing what SAIC have been doing since administrartion started....leaking information that wouldn't be helpful to other bidders...like IPR etc......may the best man win!

 

[JohnSwitzer]

Yup, I wouldn't beg to differ. But SAIC are from a model that anyone should wish to aspire to.

John

 

[Ann MG Writer]

when they are (largely) unaware of what it is that other party has to offer. John

To be even handed about this, each of the bidders and their wider camps of supporters are probably in roughly equivalent positions. Most of the 'news' we hear is from counter-briefing by bidders... there is little else, because the bidders themselves aren't likely to declare their 'USP' publicly.

 

[streetrover]

Yeh what was the government thinking of, he wants to save it for the nation?!

From Daily Mail - James seeks £80M

"Troubleshooter David james is looking for £80M of asset based financing in a last ditch attempt to buy MG Rover.

James is in talks with four separate banks to raise the money needed to bankroll future production. He has already secured £40M from property tycoon Robert Tchenguiz to cover the actual bid.

James had yesterday all but given up on receiving an £80M lifline from the Department of Trade and Industry to back his bid. But he said he was 'forging ahead with attempts to save Rover for the nation' anyway.

James has also written to administrator Pricewaterhouse-Coppers begging it not to sell Rover before the middle of next week to allow him time to secure the financing he needs"

Some interesting points there...he wants to save MGR for the nation - good bloke!.....he's expecting that PWC will have made their mind up very soon so is begging for more time...

No need to worry, the property tycoon has stumped up half the money, so James can now go and buy all of MGR and sell what he doesn't need. Oh that's right, he doesn't need much at all does he - just an acre or two and the TF production line. Well that's alright then, he's saving MG, Rover and LB for the nation, by turning it all into Strathcarron. "Who" ask 99.96% of the nation?

And in his business plan it's all going to SAIC anyway after 12 months - barely enough time to get production up and running.

And he wants the government of the nation to give him the money to do it...