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Phoenix profits while Rover sickens

Ian Griffiths
Friday April 8, 2005
The Guardian

As Longbridge stood idle yesterday, 20 miles away Studley Castle was a hive of activity.
The contrast could not have been more stark: on one hand a grimy, ailing urban car plant; on the other a stylish, flourishing banquet and conference centre set in a 28-acre estate in the rolling Warwickshire countryside.

It epitomises the changes orchestrated at Rover in the five years since it was bought from BMW for £10 by the "Phoenix Four": John Towers, Peter Beale, John Edwards and Nick Stephenson.

Then, Studley Castle was Rover's management training centre. After the overhaul of Rover's corporate structure the castle was put under the Phoenix Venture Holdings umbrella, the private company controlled by the four.
While Studley Castle has established a sound profit stream, Rover car manufacturing now relies for survival on state handouts and Chinese investment.

The four directors, together with Kevin Howe, the chief executive they brought in, have made £40m out of the business they bought for £10. A Guardian investigation last year suggested Phoenix controls businesses and assets, excluding MG Rover, worth £70m.

The core carmaking business, still making huge losses, has been isolated from a number of profitable associate businesses under the Phoenix umbrella. If the Rover loss for 2003 was stripped out, the four's private company would have made a profit of £28.5m that year, the last for which accounts are published. The four directors also benefit from an investment in MGR Capital, a venture with HBOS, set up to manage car leases retained by BMW after the sale of Rover.
 

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I think it just goes to show what astute businessmen the Phoenix 4 are. Good luck to them I say. They have obviously tried their very best to make car building at Longbridge work - I don't think it's over yet!
 
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