Rover's fire sale begins as suppliers lay off more staff

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The Independent Online

The fire sale of MG Rover's assets began yesterday as the administrators of the collapsed car maker sent out details of the production facilities at Longbridge to about 40 potential purchasers.

The fire sale of MG Rover's assets began yesterday as the administrators of the collapsed car maker sent out details of the production facilities at Longbridge to about 40 potential purchasers.

The move came as supply companies to MG Rover started laying off workers in increasing numbers and the Rover taskforce warned that as many as 8,000 employees across the dealer network stood to be affected - more than were employed at Longbridge before the axe fell last Friday.

The European Commission said it might give up to €100m (£68m) to help cushion the blow of the 5,000 job losses announced at Longbridge. The money would be redirected from the EU's existing funding programme for the West Midlands and would be used to help workers retrain for new jobs and stimulate new investment in the region.

Last week Tony Blair announced a £150m aid package to fund redundancy payments and retraining programmes although only £35m of this is new money.

Tony Lomas of PricewaterhouseCoopers, one of the joint administrators, said the aim would be narrow down the 40 prospective buyers to a small number who would then get access to detailed information about the assets for sale through an electronic "data room".

The Engineering Employers' Federation said about 1,200 workers in supply companies across the West Midlands were facing the threat of redundancy. One of them, RDS Automotive of Tipton, said it might have to shed 90 jobs over the next month.

Sir Digby Jones, the director general of the CBI and one of the members of the taskforce, said a key concern was the fate of the dealer network. "The issue of the dealerships' future viability is in many ways the most wide-ranging to emerge from the MG Rover collapse," he added.

He said there was a need for new warranty arrangements to give consumers the confidence to buy existing stocks of cars. Clarity was also needed on the financing arrangements in place between MG Rover and the dealerships for purchase of stock. "Too many small dealers will go under if stability is not brought to the situation," he warned.

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