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Rover plant suspends production

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

MG Rover has suspended production at its Longbridge plant amid a shortage of component parts, the BBC has learned.

Suppliers are not prepared to continue to supply Rover until there are further assurances over its future, prompting the suspension, it is believed.

The news comes as the group is locked in crucial talks in China Shanghai Automotive Industry Corp in a bid to save the firm and 6,000 jobs. If the talks fail MG Rover risks being forced into administration.

 
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Great - one of those self fulfilling prophesies.

Suppliers won't supply due to doubts over viability. Production suspended. Cash flow dries up. No money to pay bills. Company becomes non-viable.

QED
 

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I've stayed quiet so far on this whole situation, but some press releases are needed from MGR and the Government needs to confirm the 'loan' whether or not the deal with SAIC is concluded.
 

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If your suppliers wont supply, it needs more than a press release to fix. To be honest lack of communications is worrying. If they had a ligit reason it would be released straight away.
 

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Richard Moss said:
Great - one of those self fulfilling prophesies.

Suppliers won't supply due to doubts over viability. Production suspended. Cash flow dries up. No money to pay bills. Company becomes non-viable.

QED
Exactly. This is awful news. Sorry, but I'm starting to feel very negative right now.
 

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Daft isn't it. They're probably waiting for supplies of widgets costing 3p from some supplier whose got arsy.

Production halts are an everyday occurance though, so this really isn't news at all. 75 production was suspended during our factory tour last week whilst MG-Rover awaited parts supplies.

The thing is, all these suppliers are on pretty tight contracts, which means they will have to start paying MG-Rover compensation pretty quickly if the supplies don't start arriving.

I would have thought that resolving these problems will take a few hours on the phones, offering immediate payment terms and the alike for the next two weeks. I am lead to believe that MG-Rover have built up a good payment record over the past five years and that this hasn't changed recently, which will obviously work in their favour.

However, if I were MG-Rover I would also be invoking the compensation claims with immediate effect alongside this, so that unless parts start arriving before the end of the day the suppliers are liable for losses.
 

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Just saw a report on BBC news with a reporter standing surrounded by MGR cars saying 'if' production starts again...

Surely a shortage would feasibly only stop one line, not the whole plant....?:(
 

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Nope i think even people here are gonna have to admit things are not looking good at all. There was supposed to be news 2 days ago and we've still heard nothing, that for a start isn't good. The fact that the suppliers have stopped providing parts proves MGR can't provide any reassurance to them that they are still and will continue to be alive.
 

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boxwellm said:
Daft isn't it. They're probably waiting for supplies of widgets costing 3p from some supplier whose got arsy.

Production halts are an everyday occurance though, so this really isn't news at all. 75 production was suspended during our factory tour last week whilst MG-Rover awaited parts supplies.

The thing is, all these suppliers are on pretty tight contracts, which means they will have to start paying MG-Rover compensation pretty quickly if the supplies don't start arriving.

I would have thought that resolving these problems will take a few hours on the phones, offering immediate payment terms and the alike for the next two weeks. I am lead to believe that MG-Rover have built up a good payment record over the past five years and that this hasn't changed recently, which will obviously work in their favour.

However, if I were MG-Rover I would also be invoking the compensation claims with immediate effect alongside this, so that unless parts start arriving before the end of the day the suppliers are liable for losses.
That’s just one of the better gags! How can you file for compensation when you haven’t paid for anything? It’s more like the suppliers would send the finger breakers round to Longbridge and re-take unpaid for items!
 

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This seems really bad news. Without some fairly immediate and decisive action the whole thing could unravel really quick. It certainly has become a self fulfilling prophecy that the press have been pedalling for the last few weeks and it seems that for now at least the ****ards have got the upper hand.

Surely if SAIC want a partner its about time they realised that if you string things out for too long you can end up with nothing. Also, its about time the government say to hell with EU rules, we believe in our industry (but they won't because the civil service and a load of lawyers won't like it).
 

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MGR are blaming the media (hardly surprising) for the collapse in supplier confidence.

I assume suppliers started demanding payment upfront rather than credit which clearly MGR can't do.
 

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That’s just one of the better gags! How can you file for compensation when you haven’t paid for anything? It’s more like the suppliers would send the finger breakers round to Longbridge and re-take unpaid for items!
No. MG-Rover have contracts for supply in place. Like most manufacturers, MG-Rover have a just in time supply process for Longbridge. This means that when you run out of - say - 5amp fuses, the whole production line comes to a halt.

Now before you say "this is daft", it isn't. Just in Time has been around for a while and has some considerable cost savings and improved quality advantages. The down side is that when somebody cannot supply, the whole production line grinds to a halt.

To stop this from happening, manufacturers adopt a carrot and a stick approach. The carrot is usually a slightly higher price per item, the stick is the compensation claim when the supplier does not supply on time.

MG-Rover are not insolvent and nothing has appeared from an official source to say that they are. As a result, quite simply, the suppliers are in breach of contract with MG-Rover. This costs MG-Rover money and they are quite within their rights to expect their suppliers to compensate them.
 

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Refreshingly blunt statement from MGR, though (Reuters) -

"Given the amount of negative media reports this week it is no surprise that we have suffered a few isolated component supply problems," a MG Rover spokesman said.

"For this reason we have temporarily suspended production."
 

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the gornvernment need to just give mgr a little starter hell if we can spend billions going to war for NO reason then we can spen 1 billlion making rover what it once was!!!! the french help out their companies so why cant we do the same and save thousands of jobs. im disgusted in our government i really am.
 
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