14,000 jobs look doomed at Rover

ROVER'S Longbridge plant - and the jobs of its 14,000 workers - looked doomed this weekend after the board of its parent company, BMW, sacked its chairman and Rover's chief protector, Bernd Pischetsrieder, on Friday.

Germany's secretive Quandt family, which owns 46 per cent BMW, removed Mr Pischetsrieder as chairman after an acrimonious board meeting on Friday. And while union votes on the BMW board blocked his replacement by Wolfgang Reitzle - a long-time critic of BMW's pounds 800m 1994 purchase of Rover who would have certainly closed down the Longbridge operation in Birm- ingham - the plant still faces a uphill struggle to survive.

For its future depends on BMW investing pounds 500m in a new car to replace the Rover 200 and 400, as the German car maker is itself coming under big financial pressures.

BMW's new chairman, 56-year-old Professor Joachim Milberg, previously head of production, will have to decide swiftly on a viable strategy for BMW and its loss-making British subsidiary. With leading international rivals queuing up to bid for BMW at its moment of weakness, Mr Milberg has little time.

Politicians in Germany will continue to be heavily involved. So will Tony Blair, given that so many British jobs are at stake. On Friday, Deputy Prime Minister John Prescott called for Longbridge to be saved, but the pounds 500m investment may well seem too risky given the continuing slide in Rover's market share price and the company's pounds 300m loss last year.

While BMW's core business remains profitable and successful, many believe that its long-term future must be within a larger group such as Volkswagen or Ford. Both would be eager bidders.

"The powers that be in Germany will want a German solution involving Volkswagen. I am sure Chancellor Gerhard Schroder [a former member of Volkswagen's supervisory board] will be involved," said Professor Daniel Jones of Cardiff Business School.

Ferdinand Piech, Volkswagen chairman, has beat a path to the door of the BMW's controlling Quandt family. But Stefan Quandt and Susanna Kletten nee Quandt, both members of the BMW supervisory board, insist they remain committed to an independent BMW.

Mr Milberg will now have to decide whether BMW can remain independent, finance Rover's losses and invest heavily in Longbridge.

Many doubt that this is possible, given Rover's recent performance. Klaus- Jurgen Melz- ner, analyst at Deutsche Morgan Grenfell, believes that trying to develop a full range of Rover models has been shown to be a mistake. Markus Plumer, analyst at WestLB, thinks Rover faces "an incredibly testing six months".

The temptation to sell all or part of Rover is great. Either Ford or Volkswagen would be potential buyers or partners. Ford would be preferred by the British Government because this would reduce the job losses in the supply industry.

Even so, it would all be very painful - and Longbridge could easily prove surplus to requirements. BMW itself is considering producing the replacement of the 200 and 400 series in Hungary.

Selling Rover would not secure BMW's long-term future. A niche producer of 500,000 cars a year, it remains over-dependent on a one-car platform, the 3 series.

Professor Dan Jones said: "The chances of BMW staying independent in the longer term are slim. It has another three to five years. The competition is getting tougher all the time. Look at the new small Toyota Lexus. Audi will continue to improve, as will Mercedes Benz."

PROMOTED VIDEO
Life and Style
fashionHealth concerns and 'pornified' perceptions have made women more conscious at the beach
Arts and Entertainment
tv
Sport
Ojo Onaolapo celebrates winning the bronze medal
commonwealth games
Arts and Entertainment
Rock band Led Zeppelin in the early 1970s
musicLed Zeppelin to release alternative Stairway To Heaven after 43 years
Arts and Entertainment
High-flyer: Chris Pratt in 'Guardians of the Galaxy'
filmHe was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star
Sport
Van Gaal said that his challenge in taking over Bobby Robson's Barcelona team in 1993 has been easier than the task of resurrecting the current United side
footballA colourful discussion on tactics, the merits of the English footballer and rebuilding Manchester United
Life and Style
Sainsbury's could roll the lorries out across its whole fleet if they are successful
tech
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Travel
The shipping news: a typical Snoozebox construction
travelSpending the night in a shipping container doesn't sound appealing, but mobile crash pads are popping up at the summer's biggest events
Arts and Entertainment
'Old Fashioned' will be a different kind of love story to '50 Shades'
film
Arts and Entertainment
Tracey Emin's 'My Bed' is returning to the Tate more than 15 years after it first caused shockwaves at the gallery
artTracey Emin's bed returns to the Tate after record sale
Arts and Entertainment
Smart mover: Peter Bazalgette
filmHow live cinema screenings can boost arts audiences
Environment
Neil Young performing at Hyde Park, London, earlier this month
environment
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Project Manager (HR)- Bristol - Upto £400 p/day

£350 - £400 per annum + competitive: Orgtel: Project Manager (specializing in ...

Graduate / Trainee Recruitment Consultant - IT

£25000 per annum + OTE £40,000: SThree: Orgtel are seeking Graduate Trainee Re...

HR Business Partner - Banking Finance - Brentwood - £45K

£45000 per annum + Benefits: Ashdown Group: ** HR Business Partner - Senior H...

PA / Team Secretary - Wimbledon

£28000 - £32000 per annum + Benefits: Ashdown Group: PA / Team Secretary - Mat...

Day In a Page

Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star
How live cinema screenings can boost arts audiences

How live cinema screenings can boost arts audiences

Broadcasting plays and exhibitions to cinemas is a sure-fire box office smash
Shipping container hotels: Pop-up hotels filling a niche

Pop-up hotels filling a niche

Spending the night in a shipping container doesn't sound appealing, but these mobile crash pads are popping up at the summer's biggest events
Native American headdresses are not fashion accessories

Feather dust-up

A Canadian festival has banned Native American headwear. Haven't we been here before?
Boris Johnson's war on diesel

Boris Johnson's war on diesel

11m cars here run on diesel. It's seen as a greener alternative to unleaded petrol. So why is London's mayor on a crusade against the black pump?
5 best waterproof cameras

Splash and flash: 5 best waterproof cameras

Don't let water stop you taking snaps with one of these machines that will take you from the sand to meters deep
Louis van Gaal interview: Manchester United manager discusses tactics and rebuilding after the David Moyes era

Louis van Gaal interview

Manchester United manager discusses tactics and rebuilding after the David Moyes era
Will Gore: The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series

Will Gore: Outside Edge

The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series
The children were playing in the street with toy guns. The air strikes were tragically real

The air strikes were tragically real

The children were playing in the street with toy guns
Boozy, ignorant, intolerant, but very polite – The British, as others see us

Britain as others see us

Boozy, ignorant, intolerant, but very polite
How did our legends really begin?

How did our legends really begin?

Applying the theory of evolution to the world's many mythologies
Watch out: Lambrusco is back on the menu

Lambrusco is back on the menu

Naff Seventies corner-shop staple is this year's Aperol Spritz