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."

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
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

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions