Germans want quick and painless exit

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The Independent Online

What BMW is looking for is pretty simple - a quick and painless way to get rid of the burden of its hapless "English patient" which is sucking £2m out of the company every day and threatening to jeopardise the prized independence of the Bavarian car giant.

There are two alternatives. A viable buyer needs to be found with the finance and a business plan to allow Rover to be taken off its hands. The other option is to shut the plant.

When BMW executives meet John Towers - the former Rover chief executive leading the Phoenix consortium - they will be looking for reassurances on two specific points.

One is that Mr Towers and his consortium, including Mayflower, which supplies BMW body panels, has the finance to make a viable bid.

Secondly, they will want to be sure that Phoenix has a viable business plan - a clear idea of how it will turn Rover from the present loss-making position to one where it can pay its way.

Alchemy's bid is thought to have collapsed because of BMW's insistence that the venture capital group finds £1bn of dealer financing and loans for Rover. BMW also insisted on new conditions regarding guarantees of future supplies of parts for Rover and the financial terms of redundancies. BMW could be planning to make similar demands of Phoenix. But the fact that Phoenix plans to keep the Longbridge workforce largely intact would suggest that the question of who foots redundancy bills is less of a problem.

BMW plans to keep Cowley, in Oxford, which will continue to produce BMW models. Cowley employs 3,500. The issue is the future of Longbridge, whose 10,00 employees are in the most immediate danger.

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