Bidders scrap over Rover

Hopes that the livelihoods of Rover's 9,500 Longbridge workers in the West Midlands will be saved by a former chief executive of the British car manufacturer were yesterday dismissed by a rival bidder.

Jon Moulton, the head of the investment company which is already in talks with BMW about buying Rover, said yesterday that an alternative bid by John Towers would spell disaster for Rover.

Mr Moulton, the managing partner of Alchemy, said: "Although there may be a short-term increase in employment, in the long-term there will be approximately nil employment. In this day and age, being a small mass-producer of cars is a dead strategy."

On Friday, unions welcomed the alternative bid for Rover presented to BMW by Mr Towers, a former chief executive of the British car marque.

He is planning to maintain production of the Mini and Rover 75, as well as introducing a new, mid-range model, the Rover 30.

Mr Moulton, who is nearing the end of a period of exclusive negotiations with BMW, is planning to reduce Rover's output to 40,000 MG-badged cars each year.

It had been believed Mr Towers' bid, presented to BMW on Friday, might save the jobs of 7,500 of the 9,000 workers employed at the Longbridge factory, far more than the number which Alchemy intends to retain. But Mr Moulton said that the 7,500 figure included 2,500 workers who would be kept on by BMW anyway, to build the new Mini.

Stephen Byers, the Trade and Industry Secretary, has indicated his preference for Mr Towers' bid in the belief that it represents a better way forward than the Alchemy plan.

But Mr Moulton criticised Mr Byers for failing to hold discussions with him about the fate of the Longbridge workforce. "He has not talked to us about the level of redundancies under our plan or about any way in which we could limit the redundancies," he said.

Industry experts remain sceptical about the viability of Mr Towers, who has declined to name the financial institutions which are bank-rolling him.

Professor Garel Rhys, an automotive industry specialist from Cardiff Business School, said: "I think it remains to be seen whether their finances stack up."

Tony Woodley, chief Rover negotiator for the Transport & General Workers Union, yesterday reiterated his backing for Mr Towers' bid.

"We are actively involved with John Towers," he said. "If his bid succeeds, there is no doubt it will be a better option for us than the Alchemy one."