BMW boss blames 'bitter reality' of £2m a day losses for Rover sell-off

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The Independent Online

The German car manufacturer BMW strongly defended its decision to sell Rover, claiming yesterday that losses of £2m a day left it with "no choice" but to break up the group.

The BMW chairman, Professor Joachim Milberg, said Rover's losses rose by £152m last year to more than £730m - an increase of 26 per cent - and this was the "bitter reality" facing the parent company. He also fiercely denied that he misled the Government over the future of Rover, maintaining that he had given several warnings that the high value of the pound was causing problems.

Professor Milberg made his comments, in Germany, as MPs from the Commons Trade and Industry Select Committee visited Longbridge, on the outskirts of Birmingham, as part of an inquiry into the likely impact on jobs of the Rover sale.

Giving evidence to the select committee, Nicholas Psirides, leader of the Conservative-controlled Bromsgrove District Council, Worcestershire, one of two councils covering the Longbridge site, accused the Government of inaction.

Mr Psirides, who worked at Rover for more than 30 years, said: "What ought to have happened is the Government should have seen the signs. Six months ago, they were aware of what was going on. They knew about it, they should have done something about it.

"What other organisation can look at a business losing £2m a day and not see the writing on the wall? The Government was very much at fault."

In a heated exchange with select committee members, Lindsay Hoyle, Labour MP for Chorley, accused Mr Psirides of scoring "cheap political points".

Tom Glennan, convenor of the works committee for the Transport and General Workers Union, accepted there would be redundancies at Rover but said he did not think it was necessarily the end of the Longbridge plant.

He also expressed concerns over proposals for the venture capitalist firm Alchemy Partners to take over.

He said: "My understanding is the company takes a very short-term view. It takes companies on, reduces their workforce, makes a profit, thensells them."

But Mr Glennan had nothing but praise for the BMW style of management. "The BMW style of management was much more acceptable to peoplethan the Rover style of management," he said. "The Rover style of management was more confrontational."