Minister battles to clear his name over BMW fiasco

Stephen Byers launched a fightback yesterday amid mounting attacks that he had mishandled the crisis over BMW's decision to pull out of Rover's Longbridge plant.

The rattled Secretary of State for Trade and Industry got the approval of the German car manufacturer to release quotes by Professor Joachim Milberg, its chairman, which made clear he was not told about plans to break up Rover before the announcement on 16 March.

Mr Byers, facing Tory calls for his resignation during question time, stressed he had raised "specific questions" about how BMW proposed to tackle Rover's escalating losses at a special meeting on 10 March.

At the meeting, BMW outlined a four-point action plan for how they would cut their losses and DTI sources said Longbridge was mentioned only in terms of the pending state aid.

"BMW identified four steps that it could take in the future to turn things around," a government source said.

Although Professor Werner Sämann, the chairman of Rover, warned Mr Byers that the company was losing £2m a day, there was no suggestion that it had plans to sell off Rover.

Under the four-point plan, BMW would have increased productivity dramatically, sourced more components from overseas, concentrated on core business and reduced production of the Rover 25 and 75. The detailed minutes of telephone conversations and the meeting are due to be published next week when Mr Byers appears before the Trade and Industry Select Committee.

In the Commons, Mr Byers said: "I got assurances about the steps that were to be taken and none of them involved the disposal of Rover by BMW.

"The record will show - and before the select committee I will make this very clear when I have a chance in an hour-and-a-half session to put, chapter and verse, what happened - it will show that in December, unlike the comments made yesterday by William Hague, Professor Milberg did not say 'we may have to reconsider our whole investment in Britain altogether'."

But John Redwood, the Tory MP for Woking, said Mr Byers lacked the unequivocal support of the Prime Minister.

"Either you knew full well that Rover was in difficulty and that BMW had to take radical action, in which case you have misled and let down the workers of Longbridge, or you knew nothing about it, in which case you are totally incompetent and shouldn't be in the job.

"Will you now accept that the decent thing is to go before more damage is done, and let's have a truthful secretary of state who understands the needs of manufacturing industry?"

Mr Byers said: "What I do as secretary of state is speak on the telephone to the chairman of BMW and I meet with them and I talk to them and I raise questions to find out the situation."

He raised "specific questions" about how BMW proposed to tackle Rover's escala- ting losses at the meeting on 10 March.

"I got assurances about the steps that were to be taken and none of them involved the disposal of Rover by BMW."

Mr Byers added that he would seek a statement by Professor Milberg on how Rover's pensions scheme would be affected.

"There is clearly a degree of concern by both present and former employees about their pension entitlements," he said.