Nanjing's plan for Longbridge won't work, warns PwC

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The Independent Online

The joint administrator of MG Rover has questioned whether large-scale car manufacturing can return to its Longbridge site.

The statement by Rob Hunt, from PricewaterhouseCoopers, contradicts an announcement less than a fortnight ago from MG Rover's new owners that 100,000 cars a year could be made at the Midlands site within five years.

The Chinese company Nanjing, which bought the collapsed car maker in July, had said it was considering building up to four or five new models at the site, under plans being drawn up with UK group GB Sports Car. It claimed up to 1,200 jobs could be created

But Mr Hunt told The Independent on Sunday that Longbridge might only be suited to building a sports car.

"A good result might be a sports car," Mr Hunt said. "As a realist, I question whether anything else can be done. I am not convinced large-scale manufacturing can be done there."

He stressed that future plans for Longbridge were the responsibility of Nanjing and its partners, and not PwC. But his comments will fuel cynicism about Nanjing's commitment to the UK. The company is transporting much of MG Rover's machinery and assembly lines to China and wants a partner to fund most of the investment needed to resume large-scale car production at Longbridge. GB Sports Car has not yet announced its plans for the site.

PwC also revealed it has brought in over £40m by selling 8,500 new and used cars. This means PwC has raised around £100m from selling its assets, including the cash received from Nanjing for the business.

But creditors of MG Rover and its Powertrain engine subsidiary, who are owed a total of £1.4bn, may not see proceeds from the sales until next winter. Mr Hunt said that because of the complexity of the business, the standard 12-month period of administration might have to be extended by another six months.

According to Mr Hunt, the administrators, who have taken over operational responsibility for the Midlands site, are still valuing its remaining assets and checking claims made against it. He said a decision on whether to ask creditors to extend the administration period would be made in January.

Creditors of MG Rover should expect no more than a negligible payout, of around 5p in the pound. Powertrain creditors, owed around £150m, could receive 13p in the pound.

The National Audit Office has said it is investigating the government payments that temporarily kept MG Rover from collapsing in May this year.

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