Nanjing Automobile Corporation (NAC) will warn ministers that without tens of millions of pounds of government funding it will not be able to restart significant car production at the former MG Rover site at Longbridge.
It is understood that NAC will ask Alan Johnson, the Secretary of State for Trade and Industry, for between £10m and £50m in financial support when it submits its final business plan for the West Midlands site next month.
Wang Yaoping, the legal and commercial director for NAC in the UK, said that car production would still restart next year, as promised, even without government assistance. But he admitted that in this scenario NAC would have to scale back production levels and the number of workers to be employed.
"Whether the Government gives support will have influence on our plans," he said. But he confirmed he would suggest to the Government that without its support the company would not be able to employ as many people. "It will influence the amount of our activities," he said.
NAC, which bought the failed car maker MG Rover for £53m last July, needs £50m to restart production. It has already secured an unknown amount from Hong Kong banks. Mr Wang said its plan is to make, from next year, around 1,000 MG TF sports cars per month at Longbridge, employing up to 400 workers. But he admitted for the first time that this business plan assumes the Government will provide a significant amount of financial support.
Days before MG Rover went into administration, a year ago yesterday, the Government promised a bridging loan of up to £150m to try to ensure the proposed takeover by NAC's rival, Shanghai Automotive Industry Corporation (SAIC), went ahead, securing Longbridge's 6,000 jobs.
Mr Wang, who made it clear that he was not threatening the Government, said: "We had the message that before MG Rover went into administration, if there was any rescue plan the Department of Trade and Industry would give the company very big financial support. Of course, we hope that the DTI will give us support.
"Our company has made a commitment to resume production here. Compared with SAIC our company has already taken one step further. If they were committed to provide financial support to SAIC why not give us some kind of support? After reviewing our business plan they should know our needs."
A spokesman for the department refused to comment on Nanjing's planned request, but he stressed: "The proposed bridging loan was an unusual situation. There was still a pos-sibility that the deal with SAIC could be done. MG Rover was still a going concern at the time."
The public spending watchdog - the National Audit Office - questioned last month whether the loan represented "sufficiently good value".Reuse content