Bid to save Longbridge engine production fails

A further 421 workers were made redundant at MG Rover yesterday after administrators to the failed car maker abandoned attempts to keep engine production going at Longbridge.

A further 421 workers were made redundant at MG Rover yesterday after administrators to the failed car maker abandoned attempts to keep engine production going at Longbridge.

The administrators from PricewaterhouseCoopers had hoped to maintain production of K-series engines at MG Rover's Powertrain subsidiary for at least four months but failed to get the backing of suppliers. A total of 363 Powertrain employees will lose their jobs along with 58 at MG Rover and its high-performance car division, MG Sport and Racing.

This brings the number of redundancies at Longbridge to 5,500 since administrators were called in three weeks ago after MG Rover failed to secure a rescue deal with China's Shanghai Automotive Industry Corporation (SAIC).

SAIC already owns the intellectual property rights to the K-series engine made at Longbridge and confirmed yesterday it had made a formal approach to the administrators to buy the Powertrain production line so that it can be shipped back to China.

Powertrain had been making petrol versions of the K-series for their Land Rover Freelander. A spokesman for Land Rover, now owned by Ford, said it had built up stocks of the engines for some time in the event that MG Rover ran into trouble and now had a enough to last for the rest of the year. The Freelander is due to be replaced next year when its engines would have been sourced from Ford factories in any event.

The Rover taskforce meanwhile announced that car dealerships hit by the collapse would have access to a £41.6m emergency fund set aside initially to help only component suppliers. Individual dealerships will each be eligible for a maximum of £500,000. Sir Digby Jones, the CBI director generalwho chairs the taskforce's dealer committee, stressed that dealerships with only viable business cases would receive cash.