Rover workers sent home

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Thousands of workers at ailing car giant MG Rover were sent home on full pay today after an emergency Government loan of £6.5 million staved off mass redundancies and frantic efforts continued to save jobs.

Thousands of workers at ailing car giant MG Rover were sent home on full pay today after an emergency Government loan of £6.5 million staved off mass redundancies and frantic efforts continued to save jobs.

Administrators appointed to run the company after the collapse of talks with a proposed Chinese partner said they had no plans to resume car production at the Longbridge factory in Birmingham.

They revealed that without the Government loan they would have announced a "significant" number of redundancies today.

The 6,000 Longbridge workers held a mass meeting with union leaders and were told to go home to await developments while efforts continued to revive talks with the Shanghai Automotive Industry Corporation.

Meanwhile it was revealed that wives and partners of MG Rover workers are planning to march on Downing Street on Wednesday in protest at potential rates of redundancy pay.

The women want similar rates for workers at the Birmingham Longbridge plant as for those laid off at other British car plants in recent years.

The Longbridge workers were handed an employee brief this morning updating them on the current crisis.

A statement from the joint administrators said MG Rover and its Powertrain engine business were incurring "very significant losses", estimated at between £20 million and £25 million per month.

The statement added: "Without external cash support, the companies are unable to pay the vast majority of employees beyond Monday April 11."

Ian Powell, one of the joint administrators from PricewaterhouseCoopers (PwC), said the loan had given a breathing space while efforts were made to contact SAIC to see if the firm was still interested in a deal, as well as pursuing other expressions of interest.

"We have no plans to recommence car production. We have told workers they will be paid until further notice but there is no production going on."

Tony Lomas, from PwC, said the administrators faced a "significant challenge" in trying to resurrect the talks and he believed any meetings with SAIC would not be held before next week.

"We are doubtful that we will have a substantive conversation with SAIC this week," said Mr Lomas.

He said that Chinese newspapers were reporting today that the deal with MG Rover could still go ahead.

But he warned: "This is an extremely complex transaction and it will take some time and continued support from all parties involved."

Liz Hanks, 41, whose husband Phil has worked in the paint shop at the plant for 15 years, is hoping to meet MPs and ministers on Wednesday.

The mother of two, from Kings Norton, said: "We're trying to get as many women and children to support their husbands and fathers.

"We want the same payout as those at (the Ford plant) in Dagenham - £30,000 to £35,000 each.

"These workers are getting the minimum - £4,000 - which is not enough for any family. The Government have just taken the heart out of Birmingham. We're fighting for our children and our families."

Mrs Hanks, who was handing out contact details to workers at Longbridge today, described the potential closure of the site as "devastating".

She attacked the Government for not doing enough to save the ailing car giant.

"They're crying tears of guilt because they didn't do enough," she added.

Gemma Cartwright, whose husband Andrew, 41, also works in the paint shop, said she would accompany Mrs Hanks on the journey to London.

The 28-year-old mother of four, also from Kings Norton, said: "It's much more than just Longbridge. It's about the whole area.

"They've taken the motor show from us. They're now taking the car industry from us."

A member of the Rover Task Force, which met for the first time in Birmingham today to combat the crisis, said the Government should not be propping up any "lame ducks".

Sir Digby Jones, director-general of the CBI, said it was not the job of the Government to help failed businesses.

He said: "British governments over decades have had no success in doing that.

"Britain is home to more car makers than anywhere in the world. We have not got there by helping prop up lame ducks."

Sir Digby said the MG Rover crisis should be sorted out by the private sector.

He attacked the directors of MG Rover's owners Phoenix Venture Holdings and said their behaviour in paying themselves huge pay and pensions was "absolutely appalling".

He said the directors had not done anything illegal but he added: "It puts business in a very bad light and I want it stopped as soon as possible."

Sir Digby said the directors had a moral duty to do something to help resolve the crisis.

The venture capital firm which almost bought Rover five years ago revealed today it had contacted the administrators in the past few days.

Jon Moulton, of Alchemy, said he would be talking to the administrators again but added that the chances of doing a deal were "remote".

He told BBC Radio 4's Today programme that he wanted to know which bits of the company would be for sale. He had no idea if it would be viable to run Rover's sports car operation as a separate concern.

Tony Woodley, general secretary of the Transport and General Workers Union, told the same programme that the Government aid gave a "fighting chance" of saving jobs at Longbridge.

He insisted there was a strong business logic for clinching a deal with the Chinese company.

Mr Woodley said the Government had been very supportive and said it would be clear by the end of the week whether it was possible to prevent the "disastrous closure" of Longbridge, which, he said, could cost 20,000 jobs.

Firms that supplied Longbridge with components started laying off workers at the weekend and unions fear that could escalate in the next few days.