Longbridge saved, but 2,000 Rover jobs axed

ROVER IS to press ahead with a further 2,000 job cuts at Longbridge to bring the plant up to the productivity levels of its German parent BMW, following yesterday's announcement of a record pounds 150m aid package.

Large parts of the Longbridge plant will be razed to the ground under a pounds 1.7bn investment programme that will involve the production of a new medium-sized car and an increase in productivity levels from the current 33 cars per man to between 45 and 50 cars - closing its 30 per cent efficiency gap with BMW's plants.

While the board of BMW, the parent company, will have to approve the deal, it is highly unlikely they will reject it.

The agreement was struck between Stephen Byers, Secretary of State for Trade and Industry, and Professor Joachim Milberg, chairman of BMW, who will be recommending the package to his fellow directors.

Rover has already announced 2,500 job losses, but it expects to achieve a further 2,000 on top of that. Of the additional redundancies, about 1,000 have already been identified. Together with the transfer of workers to other sites, the Longbridge workforce has fallen from 14,000 a year ago to 9,500 now.

The expansion of the plant to build a new family-sized car to replace the Rover 200 and 400 series will result in a near-doubling of production to 500,000 cars a year.

The investment will involve the building of a new assembly hall, paint shop and body-in-white shop where the frame of the car is welded together.

Rover is aiming to produce about 350,000 units of the new car, codenamed the R30. In addition, Longbridge will produce up to 150,000 of the new Mini model from late next year under a separate pounds 400m investment programme.

It is also expected that management will be seeking further changes in working methods on top of the radical flexibility agreement already in place.

The new working practices already agreed aim at closing the productivity gap. Rover employees will work longer hours during busy periods and will then recoup the time through prolonged breaks and holidays.

Working time will be averaged over 12 months, and management agreed to reduce the average working week from 37 hours to 35. Salaries are to replace wages and overtime is to be abolished. The package borrows heavily on a one-off deal agreed by the unions for Rover's new Hams Hall engine plant near Longbridge.

Rover's financial position meant that root-and-branch changes were urgently needed. The company plunged much deeper into the red last year after sustaining huge restructuring costs. In 1998 Rover incurred a loss of pounds 650m compared with a deficit of pounds 91m the year before.

BMW said the decline in Rover's fortunes were caused by "model changes, market and currency factors and the restructuring measures".

Garel Rhys, director of Cardiff University business School, said the deal was "very good news indeed". He said: "It takes away the uncertainty and gives Rover and BMW what is in effect a new plant. Longbridge is going to be very much a streamlined facility. I just hope we are not throwing good money after bad. The company must begin to show that it can survive on its own."

Outlook, page 19

Start your day with The Independent, sign up for daily news emails
News
Ben Little, right, is a Labour supporter while Jonathan Rogers supports the Green Party
general election 2015
News
The 91st Hakone Ekiden Qualifier at Showa Kinen Park, Tokyo, 2014
news
Life and Style
Former helicopter pilot Major Tim Peake will become the first UK astronaut in space for over 20 years
food + drinkNothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
News
Kim Wilde began gardening in the 1990s when she moved to the countryside
peopleThe singer is leading an appeal for the charity Thrive, which uses the therapy of horticulture
Sport
Alexis Sanchez celebrates scoring a second for Arsenal against Reading
football
Life and Style
health
Voices
An easy-peel potato; Dave Hax has come up with an ingenious method in food preparation
voicesDave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
News
i100
News
Japan's population is projected to fall dramatically in the next 50 years (Wikimedia)
news
Life and Style
Buyers of secondhand cars are searching out shades last seen in cop show ‘The Sweeney’
motoringFlares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
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

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own