Sorry for the delay in posting this... due entirely to John Switzer related issues, rather than Professor Bhaskar related issues! Anyhow, here goes:
Firstly, I thought it would be useful to start with recent media coverage of proposals to relaunch car production at Longbridge with €1 billion of Arab money. How are the discussions with Nanjing proceeding?
Well they’re not. We approached Nanjing earlier this month, suggesting we should meet to discuss opportunities for co-operation at Longbridge. But we have yet to receive an acknowledgement of our approach. However, we are still ready to talk if and when Nanjing choose to.
I take it you’re disappointed by the apparent lack of any response from Nanjing?
Yes and no. Nanjing now own and run the Longbridge operation. It is quite clearly their prerogative as to whom they speak with and when. But I’m quietly optimistic, that we will ultimately receive a response. But I stress, much as we would welcome a meeting with Nanjing, we can’t compel them to meet with us.
Recent media reports have been treated with a considerable degree of scepticism by some people. Does this surprise you and does it disappoint you?
No, it neither surprises nor disappoints. It is only to be expected. There have been so many false dawns at Longbridge in the past.
This time last year, the UK media was trumpeting the then soon to be announced deal between MG Rover and SAIC… which of course never happened and was with the benefit of hindsight, never going to happen. Therefore, when someone comes along with a €1 billion commitment, I can well understand why people are sceptical.
However, forgetting about the past and looking toward the future, what we have is a management team ready to take position at short notice and with considerable experience within the automotive sector. As importantly, we have the necessary financial resources courtesy of AMAR, to develop and sustain long term manufacturing at Longbridge or at a greenfield site elsewhere in the West Midlands.
You mention AMAR.
Yes.
It is not a name with which many people are familiar. Exactly who or what is AMAR?
AMAR stands for American Arabian Investment & Development Holding to give it its full title. It essentially acts as an investment trust on behalf of its clients, most of whom are resident in the Middle East.
The assets under AMAR’s management are used as security to fund new ventures, across a range of markets. Investments by AMAR include composite tube production facilities, right through to outright ownership of entire back catalogues in the music industry.
So how did AMAR get involved with MG Rover?
I have worked with and advised AMAR about a number of joint ventures and acquisitions over recent years. So when MG Rover entered administration earlier this year, it made sense that AMAR and my own business MIRU co-operated together to see any opportunities that could exist to salvage something from MIRU. The original Triple A bid was the outworking of those discussions.
Surely are there not more attractive investment opportunities for AMAR to pursue? The motor industry is after all perhaps characterised at present by riches to rags, rather than rags to riches!
Perhaps, if you’re GM or Ford. But there are other automotive manufacturers who are operating profitably and sustainably.
The same in fact can be said of any industry sector. Just because Marconi and Sony may have been feeling under the weather, doesn’t necessarily mean there is no money to be made in the electronics industry.
I’m sorry, but I don’t accept your analogy.
You usedthe term ‘the original’ Triple A bid. Is the current approach to Nanjing, essentially the original bid rewritten or is it something altogether very different?
The original bid died the day PWC offloaded the business to Nanjing. Since then, things have changed dramatically at Longbridge and the original bid therefore has only limited relevance today.
In the approach to Nanjing, we have essentially ruled nothing in and nothing out. Sure we have a core business plan as to what we would like to do, but the starting point for any discussions, must be what opportunities remain given the progress that Nanjing have already made in clearing the Longbridge site. Thereafter, a decision can be made as how best to progress.
So what is the core business plan?
Well without going into specifics, which is something I cannot do, it is centred around ultimately producing in excess of 200,000 cars per annum at Longbridge.
How many platforms would you envisage in production at Longbridge at any one time?
Up to three.
Three basic platforms?
That’s correct.
Do these platforms include any MG Rover’s legacy models?
Yes, they do. They include the underpinnings of the MG ZT.
What about the ZR, ZS and TF platforms? Are they included in the plans?
No.
What about the SV?
Again, a definite no.
What about the other 2 platforms you mentioned?
They would be new platforms. Well, certainly new to Longbridge. One of them is currently under development by another manufacturer. The other is an evolution of an existing platform. But in summary, a total of 3 platforms could yield up to 14 distinct vehicles.
You mention the ZT which to many MG and Rover enthusiasts, represented the zenith of production at Longbridge. Do your plans include relaunching the ZT as we knew it?
No. It would be 2008, before anything began rolling off the Longbridge tracks. To take a car which first appeared in 1998, and relaunch it up to 9 years later fundamentally unchanged would be commercial suicide. The car will be unrecognisable from a 2005 ZT.
Which brands would you envisage the cars would be sold under?
There would be more than one brand. Which brands those will be, are clearly dependent upon discussions with third parties, which have yet to be concluded. It would be premature to speculate.
A new brand is also an option, but it is quicker and not to mention less costly to build upon the strengths of existing brands, rather than develop completely new brands and it is upon that basis, the current proposals have been devised.
Can you clarify then that to move forward, Nanjing would be required to transfer ownership of an existing or a legacy brand ?
Not necessarily. Nanjing are not the only people with access to strong, out of production brands, but if we can work with Nanjing in other areas, it would make sense to work with them too on the issue of branding, possibly even shared branding.
What would be the product offer that would differentiate your proposed product from the competition?
There are only 2 ways to ensure long term success in any industry – not just automotive. Price which requires the lowest costbase, which we don’t have and never will have. And quality, which requires the best quality within a clearly defined market segment.
Quality we can do, and can do especially well.
Firstly, I thought it would be useful to start with recent media coverage of proposals to relaunch car production at Longbridge with €1 billion of Arab money. How are the discussions with Nanjing proceeding?
Well they’re not. We approached Nanjing earlier this month, suggesting we should meet to discuss opportunities for co-operation at Longbridge. But we have yet to receive an acknowledgement of our approach. However, we are still ready to talk if and when Nanjing choose to.
I take it you’re disappointed by the apparent lack of any response from Nanjing?
Yes and no. Nanjing now own and run the Longbridge operation. It is quite clearly their prerogative as to whom they speak with and when. But I’m quietly optimistic, that we will ultimately receive a response. But I stress, much as we would welcome a meeting with Nanjing, we can’t compel them to meet with us.
Recent media reports have been treated with a considerable degree of scepticism by some people. Does this surprise you and does it disappoint you?
No, it neither surprises nor disappoints. It is only to be expected. There have been so many false dawns at Longbridge in the past.
This time last year, the UK media was trumpeting the then soon to be announced deal between MG Rover and SAIC… which of course never happened and was with the benefit of hindsight, never going to happen. Therefore, when someone comes along with a €1 billion commitment, I can well understand why people are sceptical.
However, forgetting about the past and looking toward the future, what we have is a management team ready to take position at short notice and with considerable experience within the automotive sector. As importantly, we have the necessary financial resources courtesy of AMAR, to develop and sustain long term manufacturing at Longbridge or at a greenfield site elsewhere in the West Midlands.
You mention AMAR.
Yes.
It is not a name with which many people are familiar. Exactly who or what is AMAR?
AMAR stands for American Arabian Investment & Development Holding to give it its full title. It essentially acts as an investment trust on behalf of its clients, most of whom are resident in the Middle East.
The assets under AMAR’s management are used as security to fund new ventures, across a range of markets. Investments by AMAR include composite tube production facilities, right through to outright ownership of entire back catalogues in the music industry.
So how did AMAR get involved with MG Rover?
I have worked with and advised AMAR about a number of joint ventures and acquisitions over recent years. So when MG Rover entered administration earlier this year, it made sense that AMAR and my own business MIRU co-operated together to see any opportunities that could exist to salvage something from MIRU. The original Triple A bid was the outworking of those discussions.
Surely are there not more attractive investment opportunities for AMAR to pursue? The motor industry is after all perhaps characterised at present by riches to rags, rather than rags to riches!
Perhaps, if you’re GM or Ford. But there are other automotive manufacturers who are operating profitably and sustainably.
The same in fact can be said of any industry sector. Just because Marconi and Sony may have been feeling under the weather, doesn’t necessarily mean there is no money to be made in the electronics industry.
I’m sorry, but I don’t accept your analogy.
You usedthe term ‘the original’ Triple A bid. Is the current approach to Nanjing, essentially the original bid rewritten or is it something altogether very different?
The original bid died the day PWC offloaded the business to Nanjing. Since then, things have changed dramatically at Longbridge and the original bid therefore has only limited relevance today.
In the approach to Nanjing, we have essentially ruled nothing in and nothing out. Sure we have a core business plan as to what we would like to do, but the starting point for any discussions, must be what opportunities remain given the progress that Nanjing have already made in clearing the Longbridge site. Thereafter, a decision can be made as how best to progress.
So what is the core business plan?
Well without going into specifics, which is something I cannot do, it is centred around ultimately producing in excess of 200,000 cars per annum at Longbridge.
How many platforms would you envisage in production at Longbridge at any one time?
Up to three.
Three basic platforms?
That’s correct.
Do these platforms include any MG Rover’s legacy models?
Yes, they do. They include the underpinnings of the MG ZT.
What about the ZR, ZS and TF platforms? Are they included in the plans?
No.
What about the SV?
Again, a definite no.
What about the other 2 platforms you mentioned?
They would be new platforms. Well, certainly new to Longbridge. One of them is currently under development by another manufacturer. The other is an evolution of an existing platform. But in summary, a total of 3 platforms could yield up to 14 distinct vehicles.
You mention the ZT which to many MG and Rover enthusiasts, represented the zenith of production at Longbridge. Do your plans include relaunching the ZT as we knew it?
No. It would be 2008, before anything began rolling off the Longbridge tracks. To take a car which first appeared in 1998, and relaunch it up to 9 years later fundamentally unchanged would be commercial suicide. The car will be unrecognisable from a 2005 ZT.
Which brands would you envisage the cars would be sold under?
There would be more than one brand. Which brands those will be, are clearly dependent upon discussions with third parties, which have yet to be concluded. It would be premature to speculate.
A new brand is also an option, but it is quicker and not to mention less costly to build upon the strengths of existing brands, rather than develop completely new brands and it is upon that basis, the current proposals have been devised.
Can you clarify then that to move forward, Nanjing would be required to transfer ownership of an existing or a legacy brand ?
Not necessarily. Nanjing are not the only people with access to strong, out of production brands, but if we can work with Nanjing in other areas, it would make sense to work with them too on the issue of branding, possibly even shared branding.
What would be the product offer that would differentiate your proposed product from the competition?
There are only 2 ways to ensure long term success in any industry – not just automotive. Price which requires the lowest costbase, which we don’t have and never will have. And quality, which requires the best quality within a clearly defined market segment.
Quality we can do, and can do especially well.
