MG Rover appoints administrators

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The Independent Online

MG Rover today formally appointed administrators as the company's UK factory stood at a standstill following the collapse of rescue talks.

MG Rover today formally appointed administrators as the company's UK factory stood at a standstill following the collapse of rescue talks.

Workers left the car company's Longbridge plant in Birmingham at lunchtime at the end of their normal Friday shift and were told to return for duty on Monday.

But many said they believed they had made their last car for the company and were now focusing on any payoff.

Company officials and union leaders met administrators from PWC (PricewaterhouseCoopers) in a bid to salvage motor manufacturing at Longbridge.

The owners of MG Rover, Phoenix Venture Holdings, issued a brief statement which read: "The board of directors has met with PricewaterhouseCoopers this morning. The directors are taking the necessary steps to appoint administrators from PWC for MG Rover Group and Powertrain.

"Following the completion of these formalities, the administrators will issue a statement and press release later today. All employees are asked to come to work normally on Monday."

The Transport and General Workers Union leader Tony Woodley said after meeting workers at Longbridge: "These are desperately difficult times for thousands of workers at Rover and in supplier companies, and for their families.

"A deal which could have guaranteed the future of Longbridge seemed to be within touching distance, but has now collapsed.

"The administrator, who I have met this morning, acknowledges that the priority for all of us is to explore every possibility of maintaining Longbridge as a going concern. This must include establishing whether SAIC may be prepared to reopen talks in this new context.

"No decisions about the future of the workforce are going to be made today, and there will be consultation with the unions before any such decisions are made.

"Today, Rover workers need all possible assistance, above all from political leaders, to help keep car manufacturing at Longbridge."

SAIC said today it had invested "significant time, effort and resources" discussing a potential partnership with MG Rover which would have safeguarded manufacturing at Longbridge.

The Chinese firm said it was aware of the "potential risks and challenges" to the proposed transaction, caused mainly by the weak financial position of the UK carmaker.

"It was not until the detailed due diligence was undertaken that the full extent of the financial liabilities of MG Rover became apparent," said an SAIC spokesman.

"In spite of the possibility of the UK Government making available short term bridging finances, SAIC's fundamental concerns relating to the ongoing financial state of MG Rover were not resolved.

"SAIC considered it would be imprudent to enter into a transaction in which the insolvency risks of its joint venture partner could have transferred significant financial liabilities on to the proposed UK joint venture."

SAIC added it had made all "practicable and commercial" efforts to enable the transaction to go ahead.

Trade and Industry Secretary Patricia Hewitt also visited Longbridge today and announced a £40 million Government aid package to help firms which supplied MG Rover.

A Rover task force set up by the Government will meet on Monday to deal with the consequences of the crisis and offer help to the workers.

Its chairman, Nick Paul, head of regional development agency Advantage West Midlands, said: "For some weeks, key partners in the region have been planning for the worst but working for the best, meaning we have been prepared for all eventualities at Longbridge.

"Now the situation is clear, we are in a position to act swiftly and positively to deal with the challenges facing us.

"It is important that everybody affected by the decision knows we are working hard to support them and we will give them every assistance we can over the next few weeks to help them recover."

A similar group was set up in 2000 when Longbridge was threatened with closure after Rover was sold by its then German owners BMW.

The group will include CBI director general Sir Digby Jones, local MPs Richard Burden, Tom Watson (both Labour) and Julie Kirkbride (Conservative) and local union, council and industry officials.

A range of emergency measures have already been put in place, including a website - www.rover-response.info - giving advice and contact details for MG Rover suppliers, including details of financial support and advice, and telephone hotline for companies supplying MG Rover - 0121 607 0121.

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