Blair unveils £150m MG Rover aid

BBC ^ | 4/15/05 | n/a

[kiriath_jearim]

Friday, 15 April, 2005, 16:49 GMT 17:49 UK

Blair unveils £150m MG Rover aid

Thousands of workers are now set to lose their jobs Tony Blair has announced a £150m support package to help workers being made redundant at MG Rover and the companies in the area that supply it.

The news came after administrators at the car maker said 5,000 staff would lose their jobs this weekend after a last-ditch rescue deal failed.

PricewaterhouseCoopers - the administrators - added that more redundancies could follow.

Some 1,000 staff will remain in work at MG Rover for the short term.

They will be kept on to complete work on a number of unfinished cars.

'Retraining'

Mr Blair said the collapse of Rover was a "terrible shame".

"What we now have to do is look after the workforce and the family of the workforce," he said.

Chancellor Gordon Brown said the £150m support package would include in excess of £60m to help diversify industry in the Longbridge and wider Birmingham area, and to support MG Rover's supply chain.

In addition there will be £50m to fund the retraining and re-skilling of workers made redundant, and £40m ploughed into statutory redundancy payments.

Conservative leader Michael Howard said he welcomed the support package.

"We support the decision in principle and recognise the need to help all those affected, not just those directly employed at MG Rover, but those in the dealerships and the component suppliers," he said.

'Mothball'

Earlier on Friday, a potential Chinese investor, Shanghai Automotive Industry Corp, said it would not hold any further talks with MG Rover about a tie-up or any deal to buy the company out of administration.

MG Rover's declining sales

The UK company, which employs about 6,000 people at Longbridge, was forced into administration last week after talks with Shanghai Automotive on a £1bn investment deal broke down.

The closer they looked, the less the Chinese liked what they saw

PwC said it would now be seeking to "mothball" Longbridge and sell parts of the company.

"We'll explore what we would describe as the break-up of the business - we will carry on with the interested parties who want to talk about pieces of the business," said joint administrator Tony Lomas.

Analysts see the MG sports car brand as perhaps the most valuable asset left.

PwC said that about 70 separate offers had been made for parts of the business but the offers were at an early stage and no significant bids had been offered.

It said this left it no option but to start making staff redundant.

Mr Lomas added that the pensions position at MG Rover was "really complex".

He said he had met officials from the government's recently introduced Pensions Protection Fund to discuss the situation.

Mr Blair said the Fund would "kick in" for Rover workers.

Worst fears

Tony Woodley, head of the T&G union, said the unions' worst fears had been realised. As well as the Longbridge employees, about 18,000 people at MG Rover suppliers could lose their jobs.

Ms Hewitt told the BBC the government had done everything it possibly could.

We will certainly create more jobs than there are at the moment

Anthony Glossop, boss of site owner St Modwen

Longbridge owner eyes redevelopment

Recent talks had focused on trying to persuade the Chinese firm that it was worth looking at all or part of Longbridge as a going concern.

But, after the original deal failed, unions had described the chances of stitching together a new rescue as "a million in one".

Shanghai Automotive had been put off by the "sheer scale of losses and financial liabilities the company is carrying and would go on carrying before any new models would come on stream", Ms Hewitt said.

Supplier meeting

Some of the suppliers owed a total of about £200m by MG Rover held a meeting on Friday to discuss what happens next.

HAVE YOUR SAY Measures should be taken to protect the diminishing manufacturing base in this country before we turn into a supermarket heaven

Robert Taylor, Bognor Regis

Send us your comments

The Birmingham Chamber of Commerce & Industry (BCI) said about 400 suppliers in the area had been affected by MG Rover's move into administration.

Suppliers are facing "serious and immediate cash flow problems," it said.

BCI chief executive Sue Battle said the government and banks could help suppliers with VAT and tax holidays. The BCI also called for clarification as to who owns the stock at Longbridge and what has been paid for.

A government task force set up to help MG Rover suppliers has so far made payouts of £156,000 to 26 firms.

[kiriath_jearim]

So Rover is in the "red" financially... "Red Rover, Red Rover, let Tony come over!"

[AdamSelene235]

MORONS

Come to think of it, I gave a hitch hiking neighbor a lift in the mountains the other day. He owns a Range Rover, I own a Toyota with 320,000 miles on the clock.

[Jakarta ex-pat]

Where's Bono, Bob (geldof), and Blair?

Oh I forgot.

This is British people.

[agooga]

I'd love to say that the Britsh are just socialistic fools... but then I remember our airline bailout and I just have to hold my tongue.

[Wally_Kalbacken]

My experience with British quality control came in 1974 - while working as a lot/prep staffer at a small import auto dealership in Wauwatosa, Wisconsin. Tosa Imports had a very bizarre combination of lines - Saab/Volvo/Alfa Romeo/Subaru/Triumph and motor homes. We would get transport trailers full of cars delivered to the street and it was my responsibility to drive these cars onto the main lot or to the other dealership location (about 4 miles away, where the Triumphs were sold). During 1974 the TR6 was in its twilight of production - and there was some sort of labor strife going on in Britain that year. There were deliberate labor actions to harm the brand by failing to completely or correctly assemble the vehicles before they left the factory. We would get the cars off the trailer and find them about 3/4ths assembled - and a pile of parts thrown in the small trunk (boot), The mechanics would spend hours finishing the assembly job before they could properly prep the cars for sale. I recall getting into one of the cars fresh off the truck and reaching for the shifter only to find myself grabbing a handful of the threaded gearshift - the shifter minus the knob which was probably in the glove compartment or the trunk at that moment. Later the shifter stalk came entirely out of the boot - it had not been bolted to the transmission linkage.

The cars were junk - the pure antithesis of six sigma or typical Japanese auto manufacturer's quality control. The British have to be spending a lot of time looking at each other and wondering what the hell happened - and their auto industry has to be emblematic of the problems with their country in general.

[AdamSelene235]

I'd love to say that the Britsh are just socialistic fools... but then I remember our airline bailout and I just have to hold my tongue.

Where do you think the disease of Socialism/Communism comes from? It ain't Chinese or Russian it came from the best schools of Germany and Britian.

" Stained glass out of glass coloured of Fabian Society, produced on the initiative of the writer George Bernard Shaw, eminent member of Fabian. One sees it with work with another character of first plan, Sidney Webb - founder member of Fabian Society (and founder in London of " London School of Economics " [ Marxist ] which since 1894 contributes to provide to the British Establishment its top executives) - while with the assistance of robust masses it works to reforge the world according to the legend which appears in top of the window: " remoult it nearer to the hearts desire ".

The followers of lower degree are represented knelt in bottom, in worship in front of a pile of books of socialist propaganda which one manages with difficulty to decipher some titles : " Fabian Tracs and Essays " (Opuscules fabiens et essais), " Industrial Democracy " (Dimocratie industrielle), " History of Trade Unions " (His- toire des Trade Unions, les syndicats anglais), English Social Government (Gouverne- ment social anglais), etc. The inscriptions on the ecu towards the center of the stained glass, a little on the left make a synthesis between the two scenes '.

"PRAY DEVOUTLY , reads one above, while below one encourages: HAMMER STOUTLY " Between the two blacksmiths one sees the badge of Fabian Society where is represented a crawling wolf, the back covered with a skin of lamb, to testify to aggressiveness, decision and dissimulation of the initiates, as the words of Amold Toynbee attest it, disciple of John Ruskin in Oxford, member of the Round Table and Fabian Society, when it proclaimed:

"... we must constantly deny with the lips what we did with the hand ".

[Jakarta ex-pat]

"The cars were junk - the pure antithesis of six sigma or typical Japanese auto manufacturer's quality control. The British have to be spending a lot of time looking at each other and wondering what the hell happened - and their auto industry has to be emblematic of the problems with their country in general."

I don't see a word I disagree with.

Can we spell Unions, socialism, and a masochistic love of being bullied?

[PAR35]

He owns a Range Rover,

Range Rovers and Land Rovers are made by Ford, not MG Rover.

[AdamSelene235]

Range Rovers and Land Rovers are made by Ford, not MG Rover.

Not prior to 1994.

Ford's are also pretty crappy...also thanks to stupid government policy.

[cooper72]

Where do you think the disease of Socialism/Communism comes from? It ain't Chinese or Russian it came from the best schools of Germany and Britian.

Yes but where did modern capitalism and economics come from? From Britons like Adam Smith.

PS You are partially correct. It was not the Fabians who first termed the word socialism, they were far later and very soft socialists. And communism has never had a foothold in Britain.