Mini wins breathing space for Longbridge

THE IMMEDIATE FUTURE of Rover's Longbridge plant looks to have been secured after the troubled car group confirmed that the new Mini will be built at the West Midlands site. Rover, whose parent company BMW unveiled the resignation of two top directors late on Friday, is investing pounds 400m in the new Mini and the commitment to its production at Longbridge will give the plant a reprieve of at least three years.

"The new Mini will be built at Longbridge and the 200-400 series will also be upgraded at the plant," a spokesman said.

Further good news emerged when BMW said it was looking at Britain's biggest car plant as a possible location for building a new model. Trade Secretary Stephen Byers spoke by telephone to top managers at BMW about the future of Rover after Friday's shock resignation of BMW chairman Bernd Pischetsrieder. Mr Byers wanted to tell new BMW chief Joachim Milberg of the importance Britain attached to Rover and its huge factory at Longbridge which employs 14,000 workers.

Mr Byers' office said yesterday that he had been assured that BMW "is looking closely" at Longbridge as a possible location for a new medium- sized car.

Trade unions took heart from the news but warned that the troubled factory's future was far from secure. "It's encouraging but we are not out of the woods," John Richards, spokesman for the Transport and General union, said. "Obviously we want to have a very urgent meeting with Joachim Milberg to see where BMW intends to go on this."

The new board of BMW is due to start meetings in Munich today to discuss the new cars programme and then the locations at which the various models will be built.

Charles Moss, of consultancy JD Power LMC International, said BMW was likely to choose Longbridge over alternative locations such as Hungary only if there was a hefty subsidy.

"It will depend how deep the British government is prepared to dig into its pockets.

"If they [BMW] commit to build a new medium car for Rover then I suspect they will be looking to the British government to compensate them for the inefficiencies that are inherent at Longbridge - and I think the British government will."

The political manoeuvring will take place in the shadow of increasing bid speculation, as the resignations of Mr Pischetsrieder and Wolfgang Reizle have made BMW vulnerable to a takeover. Analysts say this could come from Ford, General Motors, Volkswagen and Fiat. BMW is valued at around pounds 11bn but the Quandt family controls 48 per cent of the shares and is thought to be unwilling to sell.

Daimler-Chrysler said on Friday that "by Monday there will be at least three or four companies bidding for BMW".