Chinese alliance secures future of MG Rover plant

The Longbridge car plant brought years of speculation over its future to an end yesterday by announcing an alliance with a Chinese manufacturer, which will safeguard thousands of jobs.

MG Rover's deal provides the potential for its cars to be built in China ­ home to the world's fastest-growing car market. The two companies will also co-operate on the supply and manufacture of engines. The company said it was already taking on hundreds of new workers and recruitment would be boosted by yesterday's announcement.

But the announcement of the alliance with China Brilliance coincided with a reminder of the vulnerability of the British car industry as the Vauxhall plant in Luton made its last car, a Vectra, after almost 100 years of production. This followed the decision by Ford to pull the plug on the Dagenham car factory in Essex last month.

Longbridge, in Birmingham, which employs almost 10,000 people, had seemed on the point of closure two years ago when BMW, which then owned Rover, decided to sell the car marque. Even when the company was acquired by the Phoenix consortium of local businessmen for a nominal £10, heavy initial losses cast doubt over its ability to survive.

A threat of strike action over pay was averted earlier this year and the company went on to demonstrate a concept car at the Geneva motor show, where it acknowledged it had been involved in talks with Brilliance.

Kevin Howe, the chief executive of MG Rover, said: "This is a wide-ranging global alliance that spans the full breadth of both companies' activities and presents many opportunities. We have so much in common." Dr Brian Sun, the chief executive of Brilliance, said: "Equally important is the fact that we do not have products that compete directly, which means we can take the full benefit from our alliance without our plans conflicting in any way." A new company will to be created, with ownership shared 50:50 between MG Rover and Brilliance.

Tony Woodley, the Transport and General Workers' Union national officer, said: "While no-one should underestimate the challenges facing the car industry, this tremendous news is the last piece in the jigsaw for MG Rover, which has confounded its critics by surviving and thriving."