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Just found this over on Keiths' site (www.austin-rover.co.uk)

Under MGR News - Apr '05 link on the left hand side.
The situation as it stands:

According to one contributor to austin-rover.co.uk, a senior MGR marketing executive sums up PwC and MGR's situation in these terms (as unpalatable as some of these seem).

In its current form MGR and mass production at Longbridge is no more.

SAIC has been quick to withdraw from negotiations due in some part to government involvement; SAIC has begun to smell victory at a liquidated price, and are now viewed as worst enemy.

The Tata/CityRover contract is terminated (or is to be formally so next week).

The Indian SUV and Diesel engine ventures are being offered the Indian companies in order to simplify MGR and raise cash.

Tata has been in formal contact with the administrators about acquiring Powertrain completely, with a view to transfer to India and supply and British manufacturing plant.

A small American firm is interested in purchasing the MG SV for production in the US (and has been for a few months although it was initially just the distribution rights in the US).

A 2000 sale clause with BMW means that Ford/Land Rover are to be offered the Rover name and production rights. It is thought that if MGR goes into liquidation they will purchase the name.

Ford has stopped supplying V8 engines for the SV and ZT/Rover 75, with no more to come until the situation is finalized.

After an approach by the Administrators Ford/PAG confirmed that it does not want MG. The senior managers (not the top table people) think that the problem is this:
A. Too much time spent on wooing the Chinese/Proton.
B. X80/ MG SV project wasted cash for little benefit
C. 75 RWD platform ditto
D. CityRover did damage to brand, and the company spent too much time and effort on deal.
E. Lack of government support.
F. No new metal only pointless and costly refreshes of range with little effect on sales
G. Press attacks stopped showroom traffic


R45 replacement 10 months (and about 80 million) from production build if cash could be found.

Plan B is now MG and Powertrain to retreat to MGR owned Engine plant land, plant set up and TF and ZT to be produced along with if cash can be raised a MG version of the R45 replacement.

Rover brand to be dropped, due to terminal damage.

Possible small volume medium car (R45 replacement) to be built alongside MG version (if cash available) for sale in the UK only as an Austin (or something else not a Rover).

BMW being very helpful at this time (allowing parts still to be shipped etc)

3575 jobs to go at Longbridge.

Studley Castle to be sold and cash to new company, offers already in.

Proton/Tata/SAIC/ unnamed small car company (thought to be Porsche interested in MG only?) approached Administrators about all or part of current MGR.

Current P4 owners still want to be part of business, but feel they will be forced out, no way out but administration to clear problems.
 

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Tata has been in formal contact with the administrators about acquiring Powertrain completely, with a view to transfer to India and supply and British manufacturing plant.
Three words, one message.

NO F**KING WAY! :guns3:
 

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Considering the alternatives I think this is undoubtedly one of the most positive possible outcomes. Indian engineering is certainly on the up quality wise. But would the cost of importing still prove to be a benifit versus home based production?

Sherwood.
 

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That's a very interesting set of possibilities; yes, that many job losses are depressing and again, moving Powertrain to India would leave the UK Newco with little to call its own. Hopefully the £80m for RD60 will come from somewhere.

If this is true -

A 2000 sale clause with BMW means that Ford/Land Rover are to be offered the Rover name and production rights. It is thought that if MGR goes into liquidation they will purchase the name.


- how does that affect SAIC's plans for the Rover name?

(These sorts of things always send a shiver down my spine. I don't know why. There was a very long, in depth CAR magazine article in autumn 1991 about Rover Group's future and it was written in a similarly blunt style, and as a 9-year old kid reading it, it really worried me)
 

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I dont see it somehow, the last news release on BBC NEWS 24 said that the goverment was to buy time for the administrators to find a buyer for it as a running concern. But you never know.


IVAN
 

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This is an entirely sensible outcome. R25 and R45 had to die at some point and now is as good as ever. The new company must not be associated with old unprofitable models - this has been the problem all along. The workforce must be reduced (albeit hopefully temporarily) for the plant to be efficient.

With regard to Indian manufactured engines, this is entirely businesslike. It is well known that the castings are too expensive in this country, the new company must be cost effective to survive. If £80M can be raised, then we will at last see some new metal; no prospect of this under any other scenario. The City Rover will be dumped - good because the company cannot face having any more 1 star ratings in any of its cars on the industry magazines.

Production will decrease. There will be a hard core of demand in the UK for British cars, so excess production will disappear. In return residuals will be higher and the marque will gain respect. With production and demand better matched, new models will command higher prices, increasing profit.

With reduced production, there will be cut backs in the dealer network. Contracts should only go to approved dealers - dealers who have proven to be poor at customer care should be dumped at this opportunity - the reputation of the new marque relies on good customer care.

At the same time, though I hate to see jobs lost, it gives a chance to dump poor employees who are not committed or effective.

Rover is dead as a name, and should be jettisoned. There should be no references to the past - this should be considered a new entity.

This is radical surgery, but is precisely what is needed. This is the first solid business plan I have seen in five years. The company can rise from these ashes and become an independent force again, but only if this radical surgery is performed.
 

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Dan Lockton said:
That's a very interesting set of possibilities; yes, that many job losses are depressing and again, moving Powertrain to India would leave the UK Newco with little to call its own. Hopefully the £80m for RD60 will come from somewhere.

If this is true -



- how does that affect SAIC's plans for the Rover name?

(These sorts of things always send a shiver down my spine. I don't know why. There was a very long, in depth CAR magazine article in autumn 1991 about Rover Group's future and it was written in a similarly blunt style, and as a 9-year old kid reading it, it really worried me)


Exactly. Even though it is on Keith's site and he has good sources, I am sure those sources have sometimes fed him inaccurate information. I would caution at this time, to take it with a huge grain of salt. The only good thing I see, is that if it should all implode Ford will get the ROVER name and it will be in Land Rovers safe custody. And not in SAIC's hands. However this seems to contradict the notion in the press that SAIC now own the name. Someone is wrong. Like I said "Take it with a huge grain of salt"
 

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Sorry, but I don't see it. Raising £80Million now to productionise Nexus is all well and good, but what about the long term? That money is small fry - most of the development is supposedly already done, but what about in 6-7 years time when it needs replacement, or sooner when the 75/ZT needs replacement? I don't see how such smaller production volumes can lead to newco generating enough income to design the new cars. The way I see it is that producing what it is suggesting - what, around 50,000 cars a year? - won't do the company any favours at all. And I remain to be convinced that 25/ZR/45/ZS aren't profitable. These cars have practically no R&D funding against their names now, so must be really cheap to produce.

What MGR NEEDS in my eyes is to:

a) Shed workforce. Yes, it's sad, but some staff is better than a dead company and no staff. We've known for ages that thanks to 'jobs for life' MGR is overstaffed and this is the kick it needs to shed headcount.

b) Drop Cityrover. I was going to post myself about how this has damaged the Rover name. It has to go.

c) Selling X80 ltd is a fab idea. The Americans can have it! It adds no value.

d) Selling the 'L' and the SUV thingy aren't bad ideas, but I think in the long term (5+ years) MGR needs to have it's own class leading diesels. The SUV I didn't want to see anyway, so no loss there.

e) Selling Powertrain and re-licensing them back. Well if 'K+' is ready to go then this may be ok, but once again, what happens when K+ needs replacing? MGR can't continue to buy in someone elses engine, so will need it's own powerplant again. Hmmmm.

f) I don't neccessarily think the Rover name is too far gone. I do think that it would be worse to bring back Austin (to whom most people think Metro/Maestro/Montego, and they aren't favourable to them). Leave the Rover name on the 75, and then on 'Nexus'. Possibly (although I'm not sure about this one) drop the 25 now, and only re-introduce the Rover badge on a small car again when Nexus is established as a quality product in the same way as the 75 currently is.

g) MG aluminium sports cars?

There is a way of thinking to say that MG could stand on it's own and make sports saloons and sports cars. To do this it would only work if it took on the BMW approach - Cover most market segments. Play the 'drivers car' mantra strongly. Be the perceived best in class. This is a long term although feesible view point. The problem is how much time do we have left to be able to achieve this?

I wish we could rewind 5 years. I could've told them what they were doing wrong as they did it. It didn't take a genius. Ahhh, hindsight's such a wonderful thing.

G'night.

Simon.
 

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Regrettably, it seems that major surgery is the only way out now. They must be seen to be doing something radical and ensure that there is an entirely fresh start. It would be good news if Ford got Rover - perhaps they could revive it. It would make sense since B*W had retained rights to the name and MGR were in no position to sell it to the Chinese. (Although why did SAIC think they owned it.....?)
I'm worried about MG. Five years ago it might have made sense to have a stand-alone company but the cars are now getting older and need a cash injection quickly. Where would that come from? The MG brand must not be devalued the way that Rover has been.
I'm not sure that the arguments against MG being taken over make sense - for example, why would CityRover affect the MG name? The fact that MG's sales have actually been growing despite MGR's overall weakness is surely a good sign.
Combining Aston Martin, Jaguar, Land Rover, Rover and MG would be a fantastic combination!
 

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Simon said:
Sorry, but I don't see it. Raising £80Million now to productionise Nexus is all well and good, but what about the long term? That money is small fry - most of the development is supposedly already done, but what about in 6-7 years time when it needs replacement, or sooner when the 75/ZT needs replacement? I don't see how such smaller production volumes can lead to newco generating enough income to design the new cars. The way I see it is that producing what it is suggesting - what, around 50,000 cars a year? - won't do the company any favours at all. And I remain to be convinced that 25/ZR/45/ZS aren't profitable. These cars have practically no R&D funding against their names now, so must be really cheap to produce.

What MGR NEEDS in my eyes is to:

a) Shed workforce. Yes, it's sad, but some staff is better than a dead company and no staff. We've known for ages that thanks to 'jobs for life' MGR is overstaffed and this is the kick it needs to shed headcount.

b) Drop Cityrover. I was going to post myself about how this has damaged the Rover name. It has to go.

c) Selling X80 ltd is a fab idea. The Americans can have it! It adds no value.

d) Selling the 'L' and the SUV thingy aren't bad ideas, but I think in the long term (5+ years) MGR needs to have it's own class leading diesels. The SUV I didn't want to see anyway, so no loss there.

e) Selling Powertrain and re-licensing them back. Well if 'K+' is ready to go then this may be ok, but once again, what happens when K+ needs replacing? MGR can't continue to buy in someone elses engine, so will need it's own powerplant again. Hmmmm.

f) I don't neccessarily think the Rover name is too far gone. I do think that it would be worse to bring back Austin (to whom most people think Metro/Maestro/Montego, and they aren't favourable to them). Leave the Rover name on the 75, and then on 'Nexus'. Possibly (although I'm not sure about this one) drop the 25 now, and only re-introduce the Rover badge on a small car again when Nexus is established as a quality product in the same way as the 75 currently is.

g) MG aluminium sports cars?

There is a way of thinking to say that MG could stand on it's own and make sports saloons and sports cars. To do this it would only work if it took on the BMW approach - Cover most market segments. Play the 'drivers car' mantra strongly. Be the perceived best in class. This is a long term although feesible view point. The problem is how much time do we have left to be able to achieve this?

I wish we could rewind 5 years. I could've told them what they were doing wrong as they did it. It didn't take a genius. Ahhh, hindsight's such a wonderful thing.

G'night.

Simon.


And exactly what major car manufacturer have you run??
 

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davidcalgary said:
Regrettably, it seems that major surgery is the only way out now. They must be seen to be doing something radical and ensure that there is an entirely fresh start. It would be good news if Ford got Rover - perhaps they could revive it. It would make sense since B*W had retained rights to the name and MGR were in no position to sell it to the Chinese. (Although why did SAIC think they owned it.....?)
I'm worried about MG. Five years ago it might have made sense to have a stand-alone company but the cars are now getting older and need a cash injection quickly. Where would that come from? The MG brand must not be devalued the way that Rover has been.
I'm not sure that the arguments against MG being taken over make sense - for example, why would CityRover affect the MG name? The fact that MG's sales have actually been growing despite MGR's overall weakness is surely a good sign.
Combining Aston Martin, Jaguar, Land Rover, Rover and MG would be a fantastic combination!


I agree on your last point about MG being part of PAG, and I also would like Land Rover to be custodian of the Rover name. I happen to think though that there's a lot more twists and turns before this has all played out. Incidentally responding to the poster that says getting 80 million or so to get RDX/60 isn't going to help because they need to pay for other new models. Well obviously if the new medium car is successful it should fund the replacement. As for the 75, apparently it's heavily reworked successor is waiting in the wings to be launched within the next year. Possibly even this year.
 

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Its sad, But It would be good if Ford had Rover. At least it would be united with old friends.

MG brand name is safe. No questions about that.
 

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Simon said:
And I remain to be convinced that 25/ZR/45/ZS aren't profitable. These cars have practically no R&D funding against their names now, so must be really cheap to produce.
If MGR has followed the BMW example, all the R & D costs will be lumped together in the accounts and written off as and when they occur, rather than amortised over the life of the vehicle, so it makes it very difficult for anyone outside the company to know which models make money and which don't.

They might be profitable to produce in the volumes they were originally intended to sell, but if lower volumes are being produced, the 'Just in time' system means that MGR basically has to absorb volume-related price rises by the suppliers. It will take time to source cheaper replacement parts (China, India), so it could happen; could provide some useful cashflow.
 

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Its sad, But It would be good if Ford had Rover. At least it would be united with old friends.
I agree if Rover is go (and I don't think it will) it should be with Ford/Land Rover.

The Rover 75 is still one of the best looking cars around. I don't want live in a world with "the same old same old cars".

Here's to a postive out come for all...
 

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Nick Birse said:
Just found this over on Keiths' site (www.austin-rover.co.uk)

Under MGR News - Apr '05 link on the left hand side.

"Proton/Tata/SAIC/ unnamed small car company (thought to be Porsche interested in MG only?) approached Administrators about all or part of current MGR."

I don't have time to comment on the whole post because I'm going to a meeting soon, however how spooky is this. Last night I had a dream that Porsche had bought the rights to the MG name.....

As much as I hate to say this, in a way it would fit in with Porsches current portfolio. Porsche only make sports cars costing more than £35,000. If they purchased the MG name, they could make affordable sports cars that cost between £15,000 and £30,000 badged as MG's without diluting the Porsche brand.

Not that I'd want this to happen because I'd want MG (and Rover for that matter) to remain British.
 

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What is the point of small volume production of the 'Nexus' under the Austin name, surely Austin is more tarnished than Rover !

Also if the ZT is to remain in production why can the Rover 75 not remain too along with the Rover 55 (Nexus) both wearing Rover badges not Austin.

There must be a future with just 3000 employees at the former Powertrain site with a slimmer range of cars :

MG - TF, ZS, ZT, ZT-T
Rover - 55, 75, 75 Tourer
 
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