Rover workers will wake to an industrial-sized hangover this morning after Alchemy's decision to abandon plans to buy Rover. For some it will be caused by celebratory drinks, for others by the knowledge that the Longbridge plant has come a step nearer to closure. The thought that the Phoenix consortium is "the only show in town" may not be of too much comfort.
While unions have publicly backed the rival bid tabled by Phoenix, led by the former Rover chief executive John Towers, they have also held strong private misgivings.
Alchemy Partners, the venture capital company based in Covent Garden, was openly derided as an "asset-stripper", while Mr Towers' group was held up as the last best hope.
The mood among most workers who gathered outside the plant's main entrance yesterday was one of relief that Alchemy had pulled out.
David Seal, 30, who has worked at Rover for 10 years, returned from his Easter holiday expecting a redundancy notice on his doormat. He said: "Hopefully we can now get the people in who will give us a future. I might even take up the offer to buy a Rover car."
Shop steward Carl Lanchester, 51, described how he heard of Alchemy's withdrawal on his way to a meeting at the plant with Transport and General Workers' Union colleagues. He said: "I heard an item on the radio just as I came through the gates. I rushed in and said 'Yes, Moulton's out'. Everyone went mad."
Not all were so optimistic that the Alchemy withdrawal guaranteed the plant's future. Richard Howell, 60, who has worked for Rover for 31 years, said: "We need to keep our feet very firmly on the ground. We don't really trust BMW anymore and the threat remains."
The name now on most lips at Longbridge, which has been on a two-week lay-off and restarts production next Tuesday, is that of Mr Towers.
Assembly worker David Campbell, 40, said: "Towers is the man we want. We feel like we've been raped by BMW and Alchemy would have just finished the job. All we have wanted through this is a glimmer of hope and we can now pray with some justification that the Towers bid will come off."
But behind the scenes senior trade unionists have been criticising Mr Towers' consortium for a lack of professionalism and compulsive secrecy. Some even said that the Phoenix project relied on an injection of £500m each from the Government and BMW and that ministers would be expected to underwrite the group's loans with state funds.
The German car manufacturer has said it will decide on the future of theplant within the next month. BMW's statement made clear that the plant's closure, with the loss of 9,000 jobs, was a serious alternative.
For Eleanor Smith, 74, whose family has worked at Longbridge for three generations, it is what happens next that is her prime concern. "It's like the man on Death Row who gets a reprieve. Great, we're still alive but what sort of existence can we look forward to?"
The economics of the plant remain daunting for any new management. There is huge over-capacity in the industry globally and Rover has suffered more than most from consumer indifference. There has also been a view that cars in dealers' showrooms were about to be reduced in price.
Ministers feel that the Towers consortium may be forced to go cap in hand to the Government. The Prime Minister will then be faced with the unpalatable prospect of rescuing a "lame duck" industry or alternatively forfeiting thousands of votes in the West Midlands. Ministers would want the Phoenix consortium to rise from the ashes without visible means of support from the state. That looks unrealistic.
From the Government's point of view, the next best alternative would be that Alchemy would resume its interest in Rover; it would save 4,000 jobs without direct state aid and the West Midlands would get a modest amount of government money to mitigate the impact of the job losses.
It was noticeable on Thursday that within hours of BMW virtually casting aside the Phoenix approach, the deal with Alchemy collapsed. Unless Mr Towers raises his game, the venture capitalists could find themselves in poll position. It is perfectly possible that Jon Moulton of Alchemy has pulled out temporarily to enhance his negotiating position.Reuse content