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Discussion Starter · #1 ·
Steve McF said:
Will BMW still retain control of the Rover marque? And does that mean those b*****ds will still get royalties???!! :eek:
I don´t think that BMW receives any royalties from MGR for their use of the Rover name right now and during the last years (free of charge from BMW).

I have written it before, I don´t think that BMW has a reason to make the Chinese any presents, so the usage of the brand name - but especially the £500 million loan repayment to BMW - should be a subject.

haudit23 said:
If SAIC thinks it's going to get the rights to manufacture MG Rover's cars and have the rights to both brand names for as little as £200 million, then they really are shockingly naive.
We must wait and see. The Phoenix 4 received everything for £10 just 5 years ago (and the business is in a much worser condition now). The Chinese will know what they are doing, and they will know all the facts better as we do.

If the Phoenix 4 stay there as non executive directors, at least they will still get payed and are not in the danger to become poor. But as each of them has already made some millions out of a pocket-money, this is not a great danger for them anyway.

Diesel45 said:
In these situations barefaced lies will be told to keep people happy. I've seen it before.
100% agree.
 

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Discussion Starter · #2 ·
Sales have halved, the models are five years older now (a car like the SV that plays no role aside), and there is no longer the BMW cash/clean sheet in the background.

I fail to find something positive the Phoenix 4 have done to give the company a long term future. They have just lived from the substance. Maybe it´s good that they will be non executive directors in the future - as they will have nothing to say it´s a chance that the Chinese can do it better (*gasp for breath*).
 

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Atmos said:
I fail to find something positive
This is a more realistic quote judging by some of your posts. You always seem to look at the worst of things - why is that? And don't say that you look at things realistically, because I don't believe that you do.
 

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Atmos - how can you say the business in a worse state than five years ago?
BMW failed to make a go of it, couldn't sell it to anyone and ended up paying Phoenix to take it off their hands.

Five years on, despite all "expert" predictions, MGR is still here and has been transformed by PVH into an asset worth many millions. Quite an achievement.
PVH/MGR will retain a stake in the JV (and a percentage of any profits generated) and, even if there are some job losses, Longbridge will be more secure than it would in any other scenario.

The alternative would seem to be liquidation, with consequent financial ruin for all employees, or a take-over by a european manufacturer who would have no interest in producing any saloons at all, MG or Rover. The liability due for closure would be less than five years ago and a major could absolve themselves from blame for the closure by citing PVH's failure as proving the plant is not viable.
 

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ISW said:
Atmos - how can you say the business in a worse state than five years ago?
BMW failed to make a go of it, couldn't sell it to anyone and ended up paying Phoenix to take it off their hands.
Atmos is probably referring to sales figures, which are way down on five years ago.

It should be remembered though, that Rover losses have been reduced every year for the past four years for which there has been figures published, accounting creativity notwithstanding. It would be impressive if the losses were reduced again this year.
 

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Discussion Starter · #6 ·
EssexMGR and ISW, I´m a bit angry because I am convinced that the Phoenix 4 could have done a much better job.

We do not have a time machine - and they will not ask me anyway - but why haven´t they produced a Coupe and Convertible version of the 75 three or four years ago? At this time the model was fresh enough, the money was there.

That would have been a real step into the right direction, a chance to build a better future for MG Rover.

They have failed, now everything will depend on the mercy of the Chinese. That "Phoenix Venture Holdings will... be responsible for the pension fund and redundancy cover for MGR's workforce" sounds not very promising in this respect.

My vision of Rovers future was in general similar to the failed BMW plan: Build upmarket, high quality cars and go back to a former glory. After BMW failed the Phoenix 4 delivered the Cityrover, now the Chinese will be in control. It´s hard for me to have a positive feeling about that, at is has not much in common with the future I have wished Rover and MG.

That the losses were so heavily reduced under the Phoenix 4 is not really their success, the reason is that BMW gave the company away with a clean sheet (that saves MGR hundreds of millions every very) and that the R&D costs are on a very low level now.
 

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Atmos has stated that MGR are much worser than they were under BMW. That is in fact cobblers. The Phoenix four have done very well, The MG Z cars are superb, underated and the saviour of MGR so it can't be much worser can it.

BMW were absolutely 'ratner style' farcical in they're running of MGR. it was a joke.
 

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Discussion Starter · #8 ·
delboy said:
The Phoenix four have done very well, The MG Z cars are superb, underated and the saviour of MGR so it can't be much worser can it.
You have convinced me :confused: :eek:
 

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Atmos said:
The Phoenix 4 received everything for £10 just 5 years ago (and the business is in a much worser condition now).
WTF? The business is worse off now than when they took over? What have they been putting in the water over in Germany? The company is far more healthier now than when they took over - ok, so the sales aren't at the same level but they also aren't posting massive losses each year (although there are still losses).

But to say its in a much worse condition is simply twaddle.
 

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SteveChilds said:
WTF? The business is worse off now than when they took over? What have they been putting in the water over in Germany? The company is far more healthier now than when they took over - ok, so the sales aren't at the same level but they also aren't posting massive losses each year (although there are still losses).

But to say its in a much worse condition is simply twaddle.

Does ATMOS write for the FT?
 

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heliman said:
for if they had spent all the money they had at the start including the unsold cars, on a new medium car they would not be in the position they are in now.
Oh right - and what would have happened without the Z cars, or the TF then?
 

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SteveChilds said:
Oh right - and what would have happened without the Z cars, or the TF then?
Fair enough but the fact remains the new medium car is a bread and butter market that should have also been focused on, the fact is the car has had more delays than trains get with leaves on the line!! This car should have been in production ages ago and if reports of MGR's bank balance were right last year (I am sure they are) they had about 300 million left at the end of 2003 and in 2004 sold X Part to Caterpillar for 100 million+. At this point the new medium car was reported to be virtually finished so they had the money to get it into production. They should have done this then sought a partner. And yes I know it is easy to criticise the P4 but it makes me angry that MGR is in the position it is in, and I know TWR and China Brilliance didn't help but they should have gone it alone as they always said they would and got the thing in production. OK rant over again!!!
 

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I broadly agree withyou Hellman regarding the new medium car. In hindsight P4 should have just got on with it and focused on that project without wasting time trying to partner it or developing the SV, however good it looks it aint no moneyspinner. I also agree the Z series was a very good move but has been diluted by an innefectual marketing strategy. However I seem to recall it was to autocar that MGR officially released the Gt and 75 coupe details before any other publication......
 

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Adrian Robertsh said:
I broadly agree withyou Hellman regarding the new medium car. In hindsight P4 should have just got on with it and focused on that project without wasting time trying to partner it or developing the SV, however good it looks it aint no moneyspinner. I also agree the Z series was a very good move but has been diluted by an innefectual marketing strategy. However I seem to recall it was to autocar that MGR officially released the Gt and 75 coupe details before any other publication......
No, AutoExpress scooped the idea with spyshots/photshops long before the concepts were released!!
 

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Discussion Starter · #15 ·
SteveChilds said:
WTF? The business is worse off now than when they took over? What have they been putting in the water over in Germany? The company is far more healthier now than when they took over - ok, so the sales aren't at the same level but they also aren't posting massive losses each year (although there are still losses).

But to say its in a much worse condition is simply twaddle.
My water is fine (we drink mainly beer anyway :lol: ). As I have written, there are two good reasons that the losses are much lower now than they were under BMW, and both are not really a Phoenix 4 achievement.

The Phoenix 4 have received the company with a clean sheet from BMW, so BMW has paid everything that was in the books (all investment and development costs).

Looking at the 75 this clean sheet has a massive effect. Let´s say the investment and development costs for it have been in the area of £1.5 billion. Those costs must be recovered through the sales of this model, let´s say a tenth part of it every year, £150 million.

They planned 150,000 sales of the 75 every year, so £1,000 from every car sale to cover those costs. The sales are just a quarter of this amount, so normally £4,000 of the income of every car would be needed to cover those costs alone (just an example and not a concrete figure). Clear that this is something that could never work, the losses would be mounting further, so it´s good that the Phoenix 4 received everything for free.

The second point is that R&D is reduced to a very low level (what was it... something like £23 million for 2003). That´s just a fraction of the amount that it was before. Surely it lowers the losses, but this just works for a limited time.

That´s the main problem now, they have done nothing with a really positive long-term effect.

What they have done (CR, RWD V8, SV) has not the needed effect, as those cars are obviously not selling good enough. The Z-cars have surely been a very good idea, but as the combined sales of Rover/Z/TF/CR/Streetwise are half of the former Rover/TF sales it has not had the needed effect.

I really think that different versions on the 75 platform would have been the right way to go (at first a Coupe and Convertible, nothing too expensive for them to develop but with a huge effect, later a MPV on this platform). From this they would have been able to move further forward to a 45 replacement and so on...

That´s how I see it. I surely might be wrong with my negative Phoenix 4 view, but up to now I have read nothing to give me a reason to think so. But that´s not important anyway, nobody can change their result now.
 

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Atmos said:
My water is fine (we drink mainly beer anyway :lol: ). As I have written, there are two good reasons that the losses are much lower now than they were under BMW, and both are not really a Phoenix 4 achievement.

The Phoenix 4 have received the company with a clean sheet from BMW, so BMW has paid everything that was in the books (all investment and development costs).

Looking at the 75 this clean sheet has a massive effect. Let´s say the investment and development costs for it have been in the area of £1.5 billion. Those costs must be recovered through the sales of this model, let´s say a tenth part of it every year, £150 million.

They planned 150,000 sales of the 75 every year, so £1,000 from every car sale to cover those costs. The sales are just a quarter of this amount, so normally £4,000 of the income of every car would be needed to cover those costs alone (just an example and not a concrete figure). Clear that this is something that could never work, the losses would be mounting further, so it´s good that the Phoenix 4 received everything for free.

The second point is that R&D is reduced to a very low level (what was it... something like £23 million for 2003). That´s just a fraction of the amount that it was before. Surely it lowers the losses, but this just works for a limited time.

That´s the main problem now, they have done nothing with a really positive long-term effect.

What they have done (CR, RWD V8, SV) has not the needed effect, as those cars are obviously not selling good enough. The Z-cars have surely been a very good idea, but as the combined sales of Rover/Z/TF/CR/Streetwise are half of the former Rover/TF sales it has not had the needed effect.

I really think that different versions on the 75 platform would have been the right way to go (at first a Coupe and Convertible, nothing too expensive for them to develop but with a huge effect, later a MPV on this platform). From this they would have been able to move further forward to a 45 replacement and so on...

That´s how I see it. I surely might be wrong with my negative Phoenix 4 view, but up to now I have read nothing to give me a reason to think so. But that´s not important anyway, nobody can change their result now.

Absolutely right Atmos. In the end car making is a business. You spend
money to make money. Producing some nice looking cars that don't sell is
a waste of everyone's time.

Why don't they sell?

There is a problem that the British car press is in love with fast cars.

The published Autocar group test of the new BMW 3 against Audi, Mercedes and Jaguar
shows it. Basically, Autocar says "BMW suspension not tuned for British roads"
(i.e. terrible). Goes round bends fast and gets to 100 mph much faster than the others. 100 mph is an automatic conviction for dangerous driving in Britain.

So we have a car which is entirely unsuited for British driving conditions being awarded first prize by the British press.

This situation is confirmed by the rise in popularity of MG's v. Rovers.
Fast cars with rock hard springs sell in the UK and comfortable cars don't,
in spite of our bumpy roads and environmentally sound and safety conscious speed limit.
 

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BMW paid all the development costs? That is plan wrong... BMW wrote off the development costs against Rover's balance sheet, using Rover's capital and sales against this 'investment'. Rover's sales across the board were rising, they were making money except BMW saddled Rover with the 'investment' development costs letting Rover service the debt, yet BMW were sharing technology and not putting in the BMW part of the 'investment'.

This is especially true for MINI, Munich did not get cross charged during the later phases when Rover took control of the farcical development from a bungling Munich and yet did not cross charge them for the efforts required to put right the whole mess. All this, especially at LR and also RD30 (the shared BMW/Rover platform) led to accusations that BMW were getting a free technology transfer. BMW sold LR for £1.7bn which would have more than covered any 'losses' BMW might have incurred.

BMW used Rover's capital to the extent that it had very little liquidity because it had to service a UK debt at a time when the £: DM was at historically high levels. Hence BMW bitching about the exchange rate. Why else did BMW have to give MGR a dowry and secure a capital loan? Where had Rover cash reserves gone?

BMW did not put the Rover 'investment' in the BMW AG books only the capital outflows to service the debt. BMW had manufactured their own accounting black hole as these interest payments started to drain the company of cash resource, their financial inepititude of hedging a very large part of their liabilities in another currency beggars belief. If BMW AG had amortised the debt over a longer time period in DM, the cash required to service the debt would not have drained the balance sheets.

And as for 75 sales, I seem to remember a certain BMW appointed CEO of Rover making a complete dog's breakfast of the launch speech saying that they were going to close Longbridge. Also, constraining the car in certain market sectors did not realise the cars potential and MGR with the ZT and V8 at least have made a good attempt to do that.

Also you forgetting the £118 million quid BMW extorted out of the UK Government by threatening to move production to Hungary.... something BMW later said didn't have a scrap of truth behind it.

What PVH have done to MGR's books is to do what any large concern (remember MGR has a £1billion turnover) and that is componentise the business. Also, as R&D can be written into UK balance sheets not as a liability but a depreciable asset (tax relief can also be applied for) it makes no sense to start placing large amounts of R&D on its books because technically MGR could actually make a small profit...... then they have to start paying BMW back.
 

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Discussion Starter · #18 ·
*Doom and gloom on*

*DLN* said:
I'm sure Ford and GM would love to be in the position MGR have found themselves in, able to exploit the full potential of the Chinese market.
Sorry, but what are you talking about? The Chinese are the ones that want to make the business (that´s the reason why they do all that), and they build a puzzle out of different parts. Do you think they pay the bills and let MGR "exploit the full potential of the Chinese market"? You must think that the Chinese are extremely incompetent, I think they are the opposite.

Rovertron, BMW set aside reserves in the area of some billions to part ways with Rover. The result is always the same, they paid for the clean sheet. You ask "Where had Rovers cash reserves gone". BMW bought Rover for £800 million and took over the Rover debts of £700 million, during the next years the costs for BMW were about 5 billion. If there are have been noticeable Rover debts at the beginning, how high have those cash reserves been?
The technology transfer from Rover to BMW was limited on the Mini, cars like the X5 or 1-series have nothing to do with any Rover developments. The technology transfer from BMW to Rover was huge for the 75. The Mini R&D costs are still in the BMW books.
 
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Atmos said:
*Doom and gloom on*


Sorry, but what are you talking about? The Chinese are the ones that want to make the business (that´s the reason why they do all that), and they build a puzzle out of different parts. Do you think they pay the bills and let MGR "exploit the full potential of the Chinese market"? You must think that the Chinese are extremely incompetent, I think they are the opposite.

Rovertron, BMW set aside reserves in the area of some billions to part ways with Rover. The result is always the same, they paid for the clean sheet. You ask "Where had Rovers cash reserves gone". BMW bought Rover for £800 million and took over the Rover debts of £700 million, during the next years the costs for BMW were about 5 billion. If there are have been noticeable Rover debts at the beginning, how high have those cash reserves been?
The technology transfer from Rover to BMW was limited on the Mini, cars like the X5 or 1-series have nothing to do with any Rover developments. The technology transfer from BMW to Rover was huge for the 75. The Mini R&D costs are still in the BMW books.
BMW did not pay for the Rover 75 development - it was written off as debt to Rover Group. Also the Z4's electrics were paid for by Rover Group and the X3/X5 4x4 development was paid for by Land Rover.

Check your facts Atmos
 

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Atmos said:
My water is fine (we drink mainly beer anyway :lol: ). As I have written, there are two good reasons that the losses are much lower now than they were under BMW, and both are not really a Phoenix 4 achievement.

Water is a fairly important ingredient in beer making. :beer2:

Yes, I know about the stupid purity laws.
 
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