Rover: End of the road

After 100 years of car making, Rover has called in the administrators, which could consign the marque to history and cost 6,000 workers their jobs
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The Independent Online

MG Rover was heading for administration last night after the Government refused to provide £100m in emergency funding. Patricia Hewitt, the Trade and Industry Secretary, said the board had decided to call in receivers.

MG Rover was heading for administration last night after the Government refused to provide £100m in emergency funding. Patricia Hewitt, the Trade and Industry Secretary, said the board had decided to call in receivers.

However, there was confusion after the car manufacturer disputed her claim, saying it had asked PriceWaterhouseCoopers to "accept engagement to advise the board of directors on the current position at the company... This is a deeply worrying time for everyone and our thoughts are with them and their families." A team from PWC is expected at the Longbridge plant this morning.

Julie Kirkbride, MP for Bromsgrove, which includes part of the Longbridge plant, attacked Ms Hewitt. She said: "What right has the Government to announce that a private company has gone into administration when the directors themselves have made no such statement? The handling of the crisis at Rover has been irresponsible and shambolic."

Rover, the only remaining British-owned volume car maker, had been hoping that a last-gasp rescue deal could be secured with the Chinese car maker Shanghai Automotive Industry Corporation (SAIC).

But last night, sources at MG Rover told the Press Association that hopes of a deal had been dashed. SAIC sources also said that grant aid had not been forthcoming so "there could be no deal".

SAIC had said it would only enter a joint venture if MG Rover's parent company, Phoenix Venture Holdings, could guarantee its solvency for the next two years. The Department of Trade and Industry replied that a £100m bridging loan was only available if a deal were on the table but it would only last six months to comply with EU state aid rules. Tony Blair spent 25 minutes on the telephone last night talking to the President of China in a bid to rescue the deal.

The severity of the crisis had become clear yesterday when suppliers withdrew their support, forcing production at the Longbridge factory to be halted.

Total collapse would deal a crushing blow to the West Midlands, as well as provide a serious problem for the Government in the run-up to the election ­ the region has several marginal Labour seats. Longbridgeemploys 6,000 workers directly but three times that number of jobs are dependent on MG Rover in the local economy.

Peter Beale, MG Rover's deputy chairman, said: "Suppliers have taken away credit terms from us and that has caused the kind of crisis that not many companies could survive. We are talking about the closure of Longbridge. It is desperate."

Mr Beale, one of the four West Midlands businessmen who have made some £40m since buying MG Rover from BMW for a symbolic £10 five years ago, said the £100m bridging loan would have bought time to complete talks with the Chinese company.

Tony Woodley, general secretary of the TGWU, said he felt "distraught", adding: "I am absolutely devastated. My members have had a pretty difficult time of things over the past five years but we always thought MG Rover would find a partner to build new cars. Up to three days ago I still believed that SAIC would be that partner. This is an absolute disaster."

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