BMW tells Longbridge to fight Hungary for car

THE LONGBRIDGE car plant in Birmingham is vying with a rival location in Hungary for a pounds 1bn investment to build a new generation of family cars, BMW, the parent company of Rover, said last night.

Joachim Milberg, the new chairman of BMW, confirmed that aid applications had been made to both the British and Hungarian governments for the new model to replace the Rover 200/400 series.

However, BMW denied that its final decision on where to locate the new plant would be based on a subsidy auction. A decision on the state aid is expected in the next two to three weeks.

BMW submitted an application for around pounds 200m in aid to Stephen Byers, the Secretary of State for Trade and Industry, last week. The investment is vital to the long-term survival of Longbridge. If it is chosen for the new model, it would secure 15,000 jobs direct and could provide the springboard for a doubling of Rover's UK production from 450,000 cars to around one million by 2004-05. BMW has plans to build a range of cars from family saloons to utility vehicles based on a single platform.

Speaking last night at the Geneva Motor Show, Mr Milberg confirmed there would be a replacement for the 200/400 series, saying BMW had decided that it would remain in every sector of the car market where it currently has models. But he said no decision had been taken on the location of the investment.

A Rover spokesman added: "In the end, the BMW investment is a lot of money and they must decide which country offers the best value for shareholders."

Apart from the subsidies available, BMW will also take into account productivity targets, flexibility and desired quality levels, he added.

Mr Byers insisted yesterday that there was "no question of the Government just bailing out any failing or ailing industry". But he added: "What we are prepared to do is to look at financial support which meets three key criteria: one, to raise the skills level of people working; two, to improve productivity; and three, to secure a substantial investment from BMW itself."

The chairman of Porsche, Wendelin Wiedeking, said he would complain to Brussels about the aid to Rover this week. He is writing to the European Competition Commissioner, Karel Van Miert, demanding that any plans by the UK to subsidise Rover should be stopped. Mr Wiedeking said to offer "such a gift" amounted to unfair competition. "I cannot just stand by and ignore that a subsidy will be given - this practice should stop."

Rover has already announced 2,500 job losses as part of a plan to boost productivity and achieve savings of pounds 150m a year. But the new BMW chairman will want to extract further efficiency gains if the balance is to swing in favour of Longbridge, rather than Hungary.

A Rover spokesman said: "We are aware of the conditions they want us to meet for the investment, which includes the higher productivity, and we have been making great steps towards that.

"Obviously the fact that we have put in for a grant from the Government shows that we now have a project and we want to go ahead with it a Longbridge."

Suggested Topics
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
News
Bourgogne wine maker Laboure-Roi vice president Thibault Garin (L) offers the company's 2013 Beaujolais Nouveau wine to the guest in the wine spa at the Hakone Yunessun spa resort facilities in Hakone town, Kanagawa prefecture, some 100-kilometre west of Tokyo
i100
Voices
Oscar Pistorius is led out of court in Pretoria. Pistorius received a five-year prison sentence for culpable homicide by judge Thokozile Masipais for the killing of his girlfriend Reeva Steenkamp
voicesThokozile Masipa simply had no choice but to jail the athlete
Arts and Entertainment
James Blunt's debut album Back to Bedlam shot him to fame in 2004
music

Singer says the track was 'force-fed down people's throats'

News
i100
Life and Style
The Tinder app has around 10 million users worldwide

techThe original free dating app will remain the same, developers say

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

Helpdesk Analyst

£23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...

Senior Helpdesk Analyst / Service Desk Co-ordinator

£27000 per annum + pension, 22 days holiday: Ashdown Group: An established ind...

Senior Pensions Administrator

£23000 - £26000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...

Corporate Actions Administrator / Operations Administrator

£25 - 30k: Guru Careers: A Corporate Actions Administrator / Operations Admini...

Day In a Page

Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Let's talk about loss

We need to talk about loss

Secrecy and silence surround stillbirth
Will there be an all-female mission to Mars?

Will there be an all-female mission to Mars?

Women may be better suited to space travel than men are
Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

'They poured water on, then electrified me...'

If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
James Wharton: The former Guard now fighting discrimination against gay soldiers

The former Guard now fighting discrimination against gay soldiers

Life after the Army has brought new battles for the LGBT activist James Wharton
Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

Panic over Ebola threatens to infect the midterms

Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
Premier League coaches join the RSC to swap the tricks of their trades

Darling, you were fabulous! But offside...

Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

How to dress with authority

Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

New book on Ian Curtis sheds fresh light on the life of the late singer

'Joy Division were making art... Ian was for real' says author Jon Savage
Sean Harris: A rare interview with British acting's secret weapon

Sean Harris: A rare interview with British acting's secret weapon

The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

Tim Minchin interview

For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
Boris Johnson's boozing won't win the puritan vote

Boris's boozing won't win the puritan vote

Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

Tim Wheeler: Alzheimer's, memories and my dad

Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album