For those interested in the future of Rover an article which I found on the
"Observer" website.
Gerhard Wiederholl
"Now BMW set to axe Mini plant
Car jobs meltdown if Rover quits
Cowley
Rover in crisis: special report
Joanna Walters, Kamal Ahmed and
Denis Staunton, Berlin
Sunday April 30, 2000
BMW has drawn up secret plans to
switch production of the new Mini to
Germany and close Rover's Oxford factory
- a final twist in the catastrophe that is
likely to see Rover doomed within a week
at a cost of 120,000 British jobs.
The news comes amid reports in
Germany that Downing Street contacted
the office of German Chancellor Gerhard
Schröder to plead for more time for bids
for Rover's Longbridge factory to be
considered.
Sources revealed this weekend that if
Rover at Longbridge closes, as now
seems likely, the new Rover 75 executive
saloon - the flagship car that was meant
to revive the fortunes of the troubled
manufacturer - would be axed at Oxford,
threatening an extra 3,000 workers and up
to 10,000 jobs across the region.
The closure of Longbridge and Oxford and
the semi-closure of factories at Swindon
and Hams Hall would cost 13,000 jobs
directly at the plants, more than 60,000
component supply jobs across Britain and
up to 50,000 jobs indirectly reliant on
Rover. It could lead to a political crisis for
the Government and increase pressure on
Stephen Byers, the Trade and Industry
Secretary.
Reports in German newspapers upped the
political ante last night. Welt am Sonntag
said sources at Alchemy - whose bid for
Rover collapsed amid bitter recriminations
on Friday - had revealed the Downing
Street telephone call. They claimed the
call and the Friday breakdown are linked.
When Byers last week asked BMW for an
extension to allow the Phoenix
consortium more time to put a financial
package together for Rover last week,
BMW refused - to the anger of the
Government.
Senior BMW sources warned this
weekend that they do not believe the
Phoenix rescue consortium, run by
ex-Rover boss John Towers, has any
significant funding nor any chance of
getting any.
It has officially been given a month to
make a bid but if there is no sign of a
solid plan by this Friday, then Rover is
almost certainly finished, the sources
said.
Rover chairman Werner Samann said
yesterday that talks between Phoenix and
BMW will begin on Tuesday, warning that
if they were not successful, 'closure is
unavoidable'. In his first public statement
since the debacle unfolded, Byers said:
'It's not the role of Government to run the
commercial negotiations between the
interested parties, and while recognising
that ultimately the final decision will be a
commercial one to be taken by BMW,
there is a role for the Government in
bringing parties together and in leaving no
stone unturned in trying to achieve a
successful outcome for the workers at
Longbridge and the people of the West
Midlands. That is exactly what we shall
be doing in the days ahead.'
As unions called for further action and
planned trips to Munich to apply pressure
to BMW, the car giant made it clear it is
fighting for its independence in the face of
global predators such as Ford, General
Motors and Volkswagen. With Rover
losing £2 million a day, BMW is under
intense pressure from shareholders to
dump the company.
If Phoenix cannot raise the money and the
Government does not pump survival
funding into Rover or buy a stake in the
company within days, then it is facing the
devastating scenario of losing the entire
Rover cars business and Ford's plant at
Dagenham within the next three weeks.
It is understood that West Midlands police
are putting extra officers on standby at
Longbridge on Tuesday in case workers
come back from the Easter shutdown to
find BMW has already closed the factory
and locked them out - sparking a riot.
BMW and Alchemy blame each other for
the breakdown of talks, with sources
citing a £200m shortfall in what either side
was prepared to pay to cover redundancy
payments and ongoing liabilities.
If Phoenix also fails, BMW executives and
senior sources from across the UK car
industry have warned it is the end for
Rover.That would mean the closure of all
car- and engine-making at Longbridge,
where 8,000 people work, and the
shutdown of half and possibly all of the
Swindon body-pressing plant, which
employs 3,000 people making body
panels for Rover, MG and Land-Rover.
Ford is in the process of buying
Land-Rover and could choose to supply
its own body shells in future. GMB union
general secretary John Edmonds warned:
'There will be jobs lost in every county in
the country if this happens.'
BMW insisted this weekend that it is still
planning to move the new Mini production
line, which was being installed in
Longbridge before the latest crisis, to
Oxford to build an updated version of the
Mini for sale next year. This would keep
the 3,000 shopfloor workers employed
but, without the Rover 75, would still cost
thousands of component industry jobs
because BMW plans to source 65 per
cent of the parts for the Mini outside
Britain in order to avoid the high pound.
But officials at the Department of Trade
and Industry say they fear BMW has
plans to shut down all operations in the
UK and take the Mini project back to
Germany.
The BMW board of directors is riven with
disagreements about how to deal with
Rover and save BMW's independence.
Strong voices within the Munich HQ are
calling for rapid closure of Rover in a
desperate attempt to cut its losses and
save the German company from takeover.
BMW sources have indicated that,
although they have now given Phoenix
access to Rover's financial records, the
consortium needs to show very rapidly
that it has at least £1 billion of funding up
front to get into serious negotiations to
buy Rover.
BMW fears that if the Phoenix bid is
underfunded and Towers's plan to build
200,000 cars at Longbridge failed within
months, then BMW would be landed with
far greater liabilities than it is currently
facing. BMW has put aside £2bn to pay
for the cost of shutting down Rover."
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